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News Indirect Tax-Excise

  • Nov 08, 2021
  • Consumer relief: Govt cuts ‘central excise duty’ on petrol and diesel by Rs 5 and Rs 10

    Yielding to rising pressure from industry and the general public, the Centre on Wednesday announced reduction in the ‘central excise duty’ on petrol and diesel by Rs 5 and Rs 10 respectively. The tax cut, which will take effect from Thursday, will bring down the central taxes on petrol and diesel to Rs 27.9 per litre and Rs 21.8 per litre, respectively, enabling even higher reductions in the retail prices of the two auto fuels, as state-level ad valorem taxes are levied on a price inclusive of the central levies.

    Retail price of petrol in Delhi crossed the Rs 110-mark for the first time on Tuesday, as state-run oil marketing companies (OMCs) gradually increased the base-price of the product amid rising international crude rates. The surge in crude prices are likely to continue till the end of the year with the OPEC+ countries showing no signs of increasing production over the pre-determined levels till December, even as global crude demand is on the rise. In the absence of tax cut, the prices of both petrol and diesel would have risen further till the end of the 2021.

  • May 06, 2020
  • Centre hikes excise duty on petrol and diesel

    The Central Government has increased excise duties by Rs. 10 per litre on petrol and Rs. 13 per litre on diesel. The retail sale prices of petrol and diesel will remain unchanged as oil companies will absorb this hike, according to officials in the know.

    This excise hike will have no impact on the consumer and the revenue generated from these duties shall be used for infrastructure and other developmental item of expenditure, the officials said.

    These higher duty rate changes shall come into effect from May 6, 2020.

  • Apr 23, 2020
  • Another excise hike for petroleum products on cards to offset revenue loss

    Yearning for revenue at a time of deep resource crunch, the Centre is considering another excise duty hike on petrol and diesel. The hike could be notified after the resumption of economic activity once the nationwide lockdown is broadly lifted.
    “There may be marginal hike in excise duty to offset revenue loss due to lack of demand. Discussions are being held internally,” said a senior government official.
    A second government official said out that with hardly any economic activity, an immediate duty hike will not be productive and could be announced once the lockdown eases and demand revives. “It may be notified once the economic activity restarts more substantially," the person said.

    Amid falling international crude oil prices, the government in March introduced an enabling provision to hike excise duty on petrol and diesel by Rs 8 per litre in future in the finance Act.

  • Mar 24, 2020
  • Petrol price taxes set to rise? Govt allows Rs 8 per litre hike in duty on retail fuel

    To take the benefit of the blood bath in the global oil market, the government has today raised the cap on additional excise duty on petrol to Rs 18 per litre and diesel to Rs 12 per litre. This is an increase of Rs 8 per litre on the previous level of Rs 10 per litre on petrol and Rs 4 per litre on diesel. The rise in cap will allow the government to increase the excise duty which may or may not increase the retail prices of petrol and diesel but will definitely minimise the benefits that the common man could have got, given the freefall in crude oil prices in the international market.

    The decision took place in the amendment to the Finance Bill, 2020, which today passed in Lok Sabha. Finance Minister Nirmala Sitharaman today presented the amendment, which passed without the debate.

  • Jan 28, 2019
  • Anti-dumping duty imposed on Chinese chemical import

    The government has imposed an anti-dumping duty on a chemical from China, used in photography and manufacturing of dyes, for five years to protect domestic producers of the chemical intermediate from cheap shipments. The anti-dumping duty on Meta Phenylenediamine (MPDA) imported from China will be in the range USD 573.92-USD 1,015.44 a tonne, according to a notification of the Central Board of Indirect Taxes and Customs (CBIC). It is for the second time in a row that anti-dumping duty has been imposed on the import of the chemical from China. The duty was to expire in March 2019.

  • Jan 10, 2019
  • Govt prohibits imports of unregistered, non-complaint electronics and IT goods

    Import of electronics and IT goods without registration with the Bureau of Indian Standards (BIS) is prohibited, the government said Wednesday. Under the Electronics and IT Goods (Requirement of Compulsory Registration) order 2012, imports of these goods is allowed through the registration with the BIS or on specific exemption letter from the ministry of IT and electronics (MeitY).

  • Oct 11, 2018
  • Excise duty on jet fuel cut from 14% to 11% in relief for airlines

    The government on Wednesday cut excise duty on jet fuel from 14% to 11% to help keep airfares under check and to give relief to airlines troubled by high fuel prices. A notification from the finance ministry’s revenue department said the revised duty will be effective from Thursday. The move comes at a time when high jet fuel prices and a weaker rupee have kept airline finances under pressure, with companies having limited headroom in raising fares without losing market share as the domestic aviation market is very price sensitive. Excise duty on jet fuel was increased in March 2014 from 8% to 14%.

  • Sep 17, 2018
  • In a relief to first stage dealers, Gujarat HC allows transition of excise duty credits before cut-off date

    Providing relief to first stage dealers, the Gujarat High Court struck down provisions of the GST law that forbid transition of excise duty credits on purchases prior to June 30, 2016. The GST law did not allow credit of invoices that were more than one year old i.e., invoices which were dated prior to June 30, 2016. In the Filco Trade Centre versus Union of India case, Justice Akil Qureshi and Justice BN Karia, noted that they found clause (iv) of sub-section (3) of section 140 unconstitutional, and therefore, struck down the same. Clause (iv) of sub-section (3) of section 140 imposes a condition that excise duty credits of stock in hand could be availed in relation to invoices issued not earlier than 12 months prior to July 1, 2017.

  • Mar 31, 2018
  • CBEC clears Rs 3,000 crore refunds to exporters

    The Central Board of Excise and Customs (CBEC) has sanctioned nearly Rs 3,000 crore of refunds to exporters during the fortnightly drive undertaken by the indirect tax department from March 15 to resolve the issue of pending refunds. This is likely to ease working capital crunch being experienced by exporters since the rollout of the goods and services tax (GST) on July 1 last year. In the weekly letter to officials, CBEC chairperson Vanaja Sarna said total IGST refund sanctioned till Wednesday was Rs 7,632 crore, which includes Rs 5,339 crore cleared for disbursal to exporters before the drive began.

  • Oct 05, 2017
  • Excise duty cut on petrol, diesel adds to fiscal concerns

    Governments decision to cut excise duty on petrol and diesel will be a relief for consumers as it will lower CPI inflation by around 8-9 bps, but will add to fiscal concerns of the economy, says a Nomura report.According to the global financial services major, this decision further adds to the risk that the government will likely miss its fiscal deficit target for this fiscal."Given already stretched fiscal finances due to front- loaded spending and lower non-tax revenues, this decision further adds to the risk that the government will likely miss its 2017-18 fiscal deficit target of 3.2 per cent of GDP," Nomura said in the research note.The government had hiked excise duty on petrol and diesel in 2015-16 when international prices were declining, which resulted in substantial fiscal gains, Nomura said adding in 2017-18, the government expects total excise collection on the fuels at 2 per cent of GDP, up from 1.3 per cent in 2014-15.

  • Oct 04, 2017
  • Centre cuts excise duty on petrol, diesel by Rs.2 a litre

    Under attack for the rise in petrol and diesel prices, the Finance Ministry finally reduced the Basic Excise Duty on these fuels by RS.2 a litre, effective Wednesday.After the cut, the retail price of petrol in Delhi is expected to be near ?68 a litre, while that of diesel, RS.57.It remains to be seen whether the States will bring own the Value Added Tax rates levied by them on these two products.The Finance Ministry was also quick to point out the revenue loss that the Centre would incur on account of these reductions in excise duty: the loss would amount to Rs.26,000 crore for the whole fiscal, and about RS.13,000 crore for the remainder of the current financial year.The Ministry said the decision was taken by the government in order to cushion the impact of high prices on the common man.

  • Aug 16, 2017
  • ‘Letters of undertaking’ norms eased

    The Finance Ministry has further liberalised norms for letters of undertaking (LUT) to help exporters facing difficulties consigning shipments on time under the Goods and Services Tax regime. The Central Board of Excise and Customs has now clarified that all registered exporters who have received remittances of Rs.1 crore or 10 per cent of export turnover in the previous fiscal year will be eligible for LUTs.

  • Aug 11, 2017
  • Karnataka scraps excise permits for ethanol supplies

    Karnataka has scrapped the requirement of permits from the excise department for the movement of ethanol, becoming the first state to implement the amendments to the Industries Development and Regulation (IDR) Act. The move comes as a boost to the sugar industry that has long been pressing for the removal of such red tape across states on grounds it leads to inordinate delay and corruption, and hinders supplies for the government’s ethanol blending programme.In a letter to all deputy excise commissioners on July 27, the Karnataka government has said: “No licence will be issued from the excise department for the year 2017-18 in respect of the distilleries listed under sub-para 2.2 and 2.3. (The items covered include ethanol).”

  • May 16, 2017
  • CBEC gets a makeover ahead of GST rollout

    A month before the Goods and Services Tax (GST) rolls out nationwide on July 1, the Central Board of Excise and Customs will be rechristened the Central Board of Indirect Taxes and Customs (CBIC).It is not just the nomenclature that is undergoing change; the CBEC has nearly completed the reorganisation of its field offices, including the allocation of officers, provision of funds for new office spaces and training of staff.To be headquartered at North Block, the new Board will continue in its current form but will have a Member for GST and Central Excise, and a separate Member in charge of IT, Legal and Compliance Verification.

  • Mar 11, 2017
  • Excise growth surge ends, govt may miss CIT target

    Industrial production rose just 0.6% in the April-January period of this fiscal, against 2.7% a year earlier. Customs collections, which contracted 6.3% in December 2016, grew 10.1% in January 2017 and 10.9% in the following month, signalling a spike in gold imports. However, service tax growth has been slowing in recent months — from 12.4% in December to 9.4% in January and 7.6% in February — indicating a slowing of discretionary spending. Net of refunds, CIT collections grew just 2.6% in April-February 2016-17 from the year-ago period, against the envisaged full-year growth of 9%, indicating that the push from the last tranche of advance tax collections might not suffice to meet the target.

  • Dec 02, 2016
  • Central Board of Excise and Customs removes 1 per cent excise duty on branded gold coins

    Branded gold coins may become cheaper after the government scrapped 1 per cent excise duty on them. In a notification, the Central Board of Excise and Customs (CBEC) said excise duty will be nil on gold coins of purity 99.5 per cent and above, bearing a brand name when manufactured from gold on which appropriate duty of Customs or excise has been paid. Excise duty on branded silver coins continues to be exempted.

  • Nov 29, 2016
  • Excise duty exemption for PoS devices

    In what is seen as yet another big push of the Modi-led government towards digital economy, the Centre has provided excise duty exemption on Point-of-Sale (PoS) devices manufactured in the country.This excise duty exemption has also been extended to all goods for manufacture of POS. However, the excise duty exemption in both cases will be available only till March 31, 2017, according to a Finance Ministry notification.As on date, the total PoS machines in use is only about 1.2 million. There has been very tepid growth in the PoS universe.

  • Nov 28, 2016
  • Government removes excise duty on Point of Sale machine manufacturing

    Government today removed excise duty on goods for manufacturing of POS (Point of Sale) machines that are in great demand as merchants are being compelled to use them in the wake of currency crisis. "POS machines will be exempted from 12.5 per cent excise duty and 4 per cent SAD (Special Additional Duty) till March 31, 2017," a source said.

  • Nov 14, 2016
  • Downloads from foreign sites to turn pricier from Dec 1

    You may have to pay more for your music or e-book downloads from overseas sites with effect from December 1.This is because the Central Board of Excise and Customs has withdrawn an existing service tax exemption on overseas companies providing services such as advertisements, Web subscriptions, cloud hosting, e-books and gaming to individuals and government bodies.

  • Nov 02, 2016
  • CBEC revises duty-drawback rates

    The government has revised the duty drawback rates with effect from November 15.The revised duty drawbacks provide composite rates for products such as rubber parts (for automobile and machinery) and children’s pictures. It has also changed descriptions in certain tariff items such as packaged rice, rubber parts to prevent disputes and simplify procedures.