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<keyword id="6356916" type="UNKNOWN" weightage="20" keywordseo="excise-duty">Excise duty</keyword> can be explained as a kind of <keyword id="6354678" type="DEFINITION" weightage="20" keywordseo="Indirect-Tax">indirect tax</keyword>. Excise duty refers to the tax amount that gets included in the selling price. The other name of excise duty is excise tax. The consumer has to pay the excise duty or excise tax while making a purchase. Retailers need to calculate the excise duty from time to time and must ensure the timely payment of the same. Excise duty in the Indian context Excise duty is levied on the goods that are manufactured within India as against the custom duty which is levied on the goods that are imported from outside the country. The introduction of GST in India has made some significant changes to how excise duty works in the country. GST has subsumed a majority of indirect taxes like excise duty. This will mean that after the GST was introduced, excise duty has almost ceased to exist in the country. However, excise duty is still applicable in case of products like petroleum and liquor. Here we discuss how the concept of excise duty worked in India before the introduction of GST. The indirect tax of excise duty is generally collected by the retail seller from the customers and paid to the government. This duty is payable on the manufacture of goods. It is payable at the time of taking delivery of the goods from the place of production or from the warehouse for the purpose of selling. Since the excise duty is levied on the manufacturing of the said goods, there is no need to actually sell them to be able to recover the excise duty. The authority for the collection of excise duty in India is the Central Board of Excise and Customs (CBEC). Types of excise duty in India Traditionally speaking in India before the advent of GST, there had been three kinds of excise duty as given under. A revised understanding of the excise duty is called for after the GST took effect. Basic Excise Duty Basic excise duty is also referred to as Central Value Added Tax (CENVAT). This category of excise duty is levied on goods that are classified under the first schedule of the Central Excise Tariff Act, 1985. This duty is levied under Section 3 (1) (a) of the Central Excise Act, 1944. This excise duty is applicable for all goods excepting salt. Additional Excise Duty Section 3 of the Additional Duties of Excise also known as the goods of high importance, coming under Act 1957 levies excise duty on goods that are listed under schedule 1 of the given act. This duty is levied on some special category of goods. The central and state government charge these taxes in lieu of the sales tax. Enacted in 1978, the Act of Additional Duties of Excise (Textiles and Textile Articles) also creates room for a similar kind of legislation. Special Excise Duty This type of excise duty is levied on special goods that are classified under the Second schedule to the Central Excise Tariff Act, 1985.

What is Excise Duty and How it is calculated

The cash-strapped government will gain close to Rs 1.6 lakh crore in additional revenues this fiscal from a record increase in excise duty on <keyword id="6367091" type="UNKNOWN" weightage="20" keywordseo="petrol">petrol</keyword> and <keyword id="6356109" type="UNKNOWN" weightage="20" keywordseo="diesel">diesel</keyword>, that will help make up for revenue it lost in a slowing economy and shutting down of businesses due to <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">coronavirus</keyword> lockdown. Late on Tuesday evening, the government hiked excise duty on petrol by Rs 10 per litre and that on diesel by Rs 13 a litre to mop up gains arising from international oil prices falling to a two-decade low. <div type="Article" hostid="261" msid="75563385" title="The excise duty on petrol rises by ₹10 and on diesel by ₹13 starting May 6" mstype="2" mssubtype="0"></div> This is the second hike in excise duty in less than two months and will help government garner over Rs 1.7 lakh crore in additional revenues annually at 2019-20 level of consumption, industry officials said. Considering the slump in consumption due to travel restrictions imposed by coronavirus lockdown, the gains in the remaining 11 months of the current fiscal year (April 2020 to March 2021) will be close to Rs 1.6 lakh crore, they said. Together with Rs 39,000 crore in annual revenues gained from the March 14 excise duty hike of Rs 3 per litre each on petrol and diesel, the government stands to gain as much as Rs 2 lakh crore. State-owned fuel retailing companies, <keyword id="59622" type="DOMAIN" weightage="20" keywordseo="Indian-Oil-Corp">Indian Oil Corp</keyword> (IOC), <keyword id="170673" type="COMPANY" weightage="20" keywordseo="Bharat-Petroleum-Corp-Ltd">Bharat Petroleum Corp Ltd</keyword> (BPCL) and <keyword id="6374014" type="COMPANY" weightage="20" keywordseo="hindustan-petroleum">Hindustan Petroleum</keyword> Corp Ltd (HPCL) had frozen petrol and diesel prices since March 16, as if anticipating the government move and will now set off gains they accrued from continuing drop in international oil prices against the excise duty hike. Officials said normally retail prices would have changed with any revision in taxes but like March 14, there is no change as the excise duty hike is being adjusted against the gains consumers should have got from Brent crude oil dipping to about USD 18 per barrel - the lowest since 1999. Commenting on the excise duty hike, Vikas Halan, Senior Vice President, Corporate Finance, Moody's Investors Service, said: "Government of India's increase in petrol and diesel taxes by USD 21/barrel and USD 27/ barrel respectively will result in government's tax collection increasing by about USD 21 billion, if the tax hike is maintained for full year. "This reinforces the importance of oil marketing companies to the government of India and validates the support incorporated in our credit assessment of these companies. The tax hike could result in higher working capital outflow for the oil marketing companies, which will partly offset the working capital savings from lower inventory costs." According to a notification issued by the Central Board of Indirect Taxes and Customs, special additional excise duty on petrol has been hiked by Rs 2 per litre and road cess has been hiked by Rs 8 a litre. In case of diesel, special additional excise duty has been hiked by Rs 5 per litre and road cess has been raised by Rs 8 a litre. With this, the total incidence of excise duty on petrol has risen to Rs 32.98 per litre and that on diesel to Rs 31.83. Petrol costs Rs 71.26 a litre in Delhi and a litre of diesel comes for Rs 69.39. Central excise duty makes up for 46 per cent of petrol and diesel price now. After considering local sales tax or VAT, the total tax incidence in the price is as high as 60 per cent. The excise tax on petrol was Rs 9.48 per litre when the Modi government took office in 2014 and that on diesel was Rs 3.56 a litre. The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices. In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government's excise mop up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15. It cut excise duty by Rs 2 in October 2017 and by Rs 1.50 a year later. But it raised excise duty by Rs 2 per litre in July 2019. It again raised excise duty on March 14 by Rs 3 per litre. In preparation for the excise duty hike, Finance Minister Nirmala Sitharaman had at the fag end of the Budget session of Parliament took the authorisation to raise excise duty on petrol and diesel by Rs 8 per litre each in future. Sitharaman through an amendment to the Finance Bill, 2020 raised the limit up to which the government can raise special excise duty on petrol and diesel to Rs 18 per litre and Rs 12 per litre, respectively. The March 14 excise duty hike included Rs 2 a litre increase in special additional excise duty and Re 1 in road and infrastructure cess. This hike took the special additional excise duty to maximum permissible limit in law - Rs 10 in case of petrol and Rs 4 in case of diesel. This, through an amendment to the Eighth Schedule of the Finance Act, was increased to Rs 18 per litre in case of petrol and Rs 12 in case of diesel. Government sources said the Centre has taken this step of increasing duty to raise some revenue in view of a tight fiscal situation. This would help in generating the resources to meet expense of coronavirus fight as well as meet other spending needs such as on infrastructure. <div type="Article" hostid="261" msid="75569073" title="Fear and loathing in shopping malls⁠ — the owners call for help in the fight for survival from the coronavirus crash" mstype="2" mssubtype="0"></div>

India to gain ₹1.6 lakh crore this fiscal from record excise duty hike on petrol, diesel

International oil prices on Monday plunged to a 17-year low but retail petrol and <keyword id="6356109" type="COMPANY" weightage="20" keywordseo="diesel">diesel</keyword> prices in India remained on freeze as oil companies continued to set off gains against the excise duty hiked by the <keyword id="26362" type="ORGANIZATION" weightage="20" keywordseo="Government">government</keyword>. <keyword id="144508" type="COMPANY" weightage="20" keywordseo="Brent">Brent</keyword> crude futures dropped to around USD 23 per barrel - the lowest since November 2002, while US crude briefly dipped below USD 20 as <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">coronavirus</keyword> lockdowns dried up <keyword id="6358993" type="UNKNOWN" weightage="20" keywordseo="demand">demand</keyword> while the crude surplus ballooned. Petrol and diesel prices in India, however, remained on freeze for the 14th day in a row. Rates were last revised on March 16 and since then oil firms continue to adjust the fall against the Rs 3 per litre hike in excise duty on two fuels done by the government. In Delhi, petrol is priced at Rs 69.59 per litre while in Mumbai it comes for Rs 75.30. Diesel is priced at Rs 62.29 per litre in Delhi and Rs 65.21 in Mumbai. The excise duty hike, which would give the government Rs 39,000 crore additional revenue, could have led to an increase in retail prices by Rs 3 per litre each, but the oil companies did not pass on the increase. Instead, they kept adjusting it against the fall in international crude prices. Soon after the excise duty hike, the government took authorisation from Parliament to raise excise duty on petrol and diesel by Rs 8 per litre each in future. After the March 14 increase in taxes, the total incidence of excise duty on petrol has risen to Rs 22.98 per litre and that on diesel to Rs 18.83. The tax on petrol was Rs 9.48 per litre when the Modi government took office in 2014 and that on diesel was Rs 3.56 a litre. The BJP-led government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices. In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped the government's excise mop-up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15. It cut excise duty by Rs 2 in October 2017 and by Rs 1.50 a year later. But, it raised excise duty by Rs 2 per litre in July 2019. The Saudi-Russia oil price war, combined with the destruction of demand by the coronavirus pandemic, has led to the slump in international rates. Globally, 100 million barrels of oil is normally consumed daily, but forecasters predict as much as a quarter of that has disappeared in just a few weeks. ANZ MKJ

Global crude oil prices fall to 18-year old low but Indian fuel prices unchanged

<ul><li><keyword id="6367091" type="UNKNOWN" weightage="20" keywordseo="petrol">Petrol</keyword> and diesel prices reached an all-time high in <keyword id="3658" type="COUNTRY" weightage="20" keywordseo="India">India</keyword> this morning. </li><li>Not only is this a result of the rise in global <keyword id="6359072" type="UNKNOWN" weightage="20" keywordseo="oil">oil</keyword> prices, which are nearing $80 a barrel, but also because of the Indian <keyword id="26362" type="ORGANIZATION" weightage="20" keywordseo="Government">government</keyword>’s <keyword id="6356916" type="UNKNOWN" weightage="20" keywordseo="excise-duty">excise duty</keyword> hikes. </li><li>Excise duties and value-added taxes currently comprise over 50% and 40% of the price of petrol and diesel, respectively. </li></ul> Paid a bomb for fuel today? After a three-week pause in the build-up to the Karnataka elections, fuel prices in India reached <a href="https://www.iocl.com/TotalProductList.aspx">a record high</a> this morning after increasing for eight consecutive days. In Delhi, petrol and diesel cost ₹76.87 per litre and ₹68.08 per litre, respectively - a 10% plus rise from the beginning of 2018. The highest fuel prices in the country were seen in Mumbai, where petrol is being sold for ₹84.70 per litre, while diesel costs ₹72.48 per litre. Since June last year, India has had a dynamic pricing regime, wherein fuel prices change on a daily basis in response to the global market. This alarming spike, however, begs the question. Why are fuel prices in India so high? Firstly, global oil prices are rising, <a href="https://oilprice.com/">nearing $80</a> a barrel amid curbs in production by OPEC (Organisation of Petroleum Exporting Countries) countries like Saudi Arabia. However, if this were the only reason, then countries that import oil from India, like <a href="http://ceypetco.gov.lk/marketing-sales/">Sri Lanka</a>, where petrol is currently ₹59 a litre, and Bangladesh, where petrol is <a href="http://www.bpc.gov.bd/contactus.php?id=39">₹69 a litre</a>, would have similar (if not higher) fuel prices. In addition to the global price of crude oil that is borne by distributors, fuel prices in India are composed of excise duty, which is collected by the central government, and value-added tax, which goes to state governments. The higher fuel prices are a direct result of the central government’s taxation and excise policy on petrol and diesel. Since taking over the Centre in 2014, the BJP-led government has hiked excise duties on fuel more than 10 times. It bears mentioning, however, that there have been no hikes this year though global oil prices have risen. Since the initial part of the BJP’s stint coincided with a sharp reduction in global oil prices, it imposed higher duties on customers in order to increase its revenues. As a result, consumers did not benefit from lower oil prices. Despite the price of Brent crude oil plummeting from <a href="https://oilprice.com/oil-price-charts">$102 a barrel </a>in July 2014 to $34 in early 2016, the price of petrol in Delhi only fell from <a href="https://www.iocl.com/Product_PreviousPrice/PetrolPreviousPriceDynamic.aspx">₹73.6 per litre</a> in July 2014 to a low of ₹56.6 by March 2016. From an excise duty of ₹9.20 a litre on unbranded petrol in November 2014, excise duties currently stand at ₹19.48 per litre. Meanwhile, the excise duty on diesel has risen from ₹3.55 a litre in November 2014 to a current level of ₹15.33. Thus, excise duties comprise roughly 25% of the purchase price of fuel today. Including VAT, the proportion comes to <a href="http://www.thehindu.com/news/national/petrol-diesel-prices-hit-highest-level/article23957119.ece">more than 50% in the case of petrol and over 40% for diesel. </a> A correction is necessary High fuel prices affect everyone. They significantly increase your transportation expenses and reduce your disposable income. They increase the costs of transporting goods for companies, which leads to higher product prices. They lead to higher airfare. Even if you don’t own a car, you end up paying higher for transport. The government is likely aware that higher fuel prices and the resulting contraction in demand and investment will weigh on economic growth. Hence, it needs to act decisively. Earlier this week, India’s Oil Minister, Dharmendra Pradhan, told reporters that the government was <a href="https://timesofindia.indiatimes.com/city/bhubaneswar/alternatives-being-explored-to-check-fuel-prices-oil-minister/articleshow/64253207.cms?&amp;utm_source=Articleshow&amp;utm_medium=Organic&amp;utm_campaign=Related_Stories">exploring measures to reduce fuel prices </a>but he gave no details on what these measures were. Since the government has no control over international oil prices, it seems that the only option at its disposal could be to reduce either the duties or value-added taxes on fuel. Another measure involves scrapping duties and value-added taxes entirely and bringing fuel products under the GST regime - something that has been proposed by a number of experts as well <a href="https://www.financialexpress.com/industry/ficci-for-urgent-excise-duty-cuts-on-fuel-as-transport-oil-prices-cross-previous-highs-in-delhi/1175293/">as the FICCI,</a> an industry association. Even the highest tax rate of 28% for luxury products would result in lower prices. Any measures, however, will entail a reduction in government revenues. But it will be worth the boost to aggregate demand.

Here’s why fuel prices in India are at a record high

The concept of <keyword id="6354678" type="DEFINITION" weightage="20" keywordseo="Indirect-Tax">indirect tax</keyword> has been introduced in India in order to reduce the burden on the tax payers. In other words, we can say that the burden of these taxes are borne by someone else other than the taxpayer. What is Indirect Tax? As the name indicates, indirect tax is levied on goods and services that carry a higher price. Some of the typical examples of indirect <keyword id="707923" type="PERSON" weightage="20" keywordseo="taxes-in-India">taxes in India</keyword> include service tax, value added tax (<keyword id="6370857" type="UNKNOWN" weightage="20" keywordseo="VAT">VAT</keyword>), central excise and customs duty. Different kinds of indirect taxes levied in India Service tax Service tax is applicable to be paid by the entities that provide services like consulting, legal assistance and other such services. This kind of tax is collected from the recipients of the services and paid to the Central Government. Starting from June 1, 2016, service tax was fixed at 14% along with Swacch Bharat Cess (0.5%) and Krishi Kalyan Cess (0.5%). Thus the resulting rate of service tax chargeable is 15%. Small service providers who do not make more than Rs 10 Lakhs per annum are exempted from paying the service tax in India. <keyword id="6356916" type="UNKNOWN" weightage="20" keywordseo="excise-duty">Excise duty</keyword> Excise duty is applied on all kinds of goods that are manufactured in India. This kind of indirect tax needs to be paid by the manufacturers and then eventually passed on to the end buyers. Excise duty is levied by the Central Government in India. This tax works based on the provisions found in the Central Excise Act, 1944. VAT Value Added Tax (VAT) is levied on the sale of goods that are movable within the nation. VAT is charged during all stages of production and distribution channels that include the instance of value addition. The State Governments levy this tax under Entry 54 of the State List. Customs duty Customs duty is a kind of indirect tax that is applicable to goods imported from other countries. This is payable towards getting some goods inside the country. In some cases, this kind of tax is also levied on exported goods. The Customs Act, 1962 contains the procedures and regulations on how the customs duty must be levied, how it must be collected and the procedures of imports and exports, penalties, offenses and prohibitions. Securities Transaction Tax (STT) Securities transaction tax is levied while purchasing or selling stocks through the Indian stock exchange. Introduced in the year 2004, STT is applicable in cases of shares, mutual funds, and future and options transactions. STT was levied in order to bring down the short-term capital gains tax and eradicate the long-term capital gains tax. Stamp duty This kind of indirect tax is charged by the state government while movable and immovable properties are transferred within their jurisdiction. Also, stamp duty is made compulsory on all kinds of legal documents. The rates of stamp duty varies from one state to another. <keyword id="62084" type="ORGANIZATION" weightage="20" keywordseo="Entertainment-tax">Entertainment tax</keyword> Entertainment tax is yet another kind of indirect tax levied by the state government on the different kinds of transactions connected to entertainment. Some examples to entertainment taxes are movie tickets, stage shows, amusement parks, sports activities, adventures, video game arcades and others.

Here’s all you need to know about Indirect Tax in India

(Eds: Adding analyst comments) New Delhi, May 6 () The Union government will gain close to Rs 1.6 lakh crore in additional revenues this fiscal from a record hike in excise duty on petrol and diesel that has pushed total incidence of taxation on auto fuels to 70 per cent of the price.Late on Tuesday evening, the government hiked excise duty on petrol by Rs 10 per litre and that on diesel by Rs 13 a litre to mop up gains arising from international oil prices falling to a two-decade low.Petrol price remained unchanged at Rs 71.26 a litre and diesel at Rs 69.39 as state-owned oil firms set off the excise duty hike against gains they accrued from fall in international oil rates.This is the second hike in excise duty in less than two months and will help the government garner over Rs 1.7 lakh crore in additional revenues annually at 2019-20 level of consumption, industry officials said.Considering the slump in consumption due to travel restrictions imposed by coronavirus lockdown, the gains in the remaining 11 months of the current fiscal year (April 2020 to March 2021) will be close to Rs 1.6 lakh crore, they said.Together with Rs 39,000 crore in annual revenues gained from the March 14 excise duty hike of Rs 3 per litre each on petrol and diesel, the government stands to gain as much as Rs 2 lakh crore.After the excise duty hike, taxes - both central excise and state VAT) - make up for 70 per cent of the price of petrol and diesel. A litre of petrol costs only Rs 18.28 per litre in Delhi but after including excise duty (Rs 32.98), dealer commission (Rs 3.56) and VAT (Rs 16.44) the price for consumer comes to Rs 71.26 a litre.Similarly, a litre of diesel costs only Rs 18.78 but after including excise duty (Rs 31.83), dealer commission (Rs 2.52) and VAT (Rs 16.26), it is priced at Rs 69.39 for consumers.State-owned fuel retailing companies, Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) had frozen petrol and diesel prices since March 16, anticipating the government move and will now set off gains they accrued from the continuing drop in international oil prices against the excise duty hike.ICICI Securities said the excise duty hike would mean a plunge in gross auto fuel marketing margin by 64 per cent (Rs 12.1 a litre) from Rs 19 on May 5 to Rs 6.9 on May 6.Emkay Global said oil marketing companies (OMC) have continued to pass on numerous VAT rate hikes implemented on petrol and diesel by states, but as gross margins touched a high of over Rs 18/20 on Tuesday, the excise hikes are most likely to be absorbed."The overall price freeze has now crossed 45 days. OMC officials have stated unrealistic global prices to be the reason behind this, but looking at the 60 per cent estimated drop in auto-fuel consumption, the 6-7x jump in marketing margin from normative rate implies more than making up for the volume hit," it said.Officials said normally retail prices would have changed with any revision in taxes but like March 14, there is no change as the excise duty hike is being adjusted against the gains consumers should have got from Brent crude oil dipping to about USD 18 per barrel - the lowest since 1999.Commenting on the excise duty hike, Vikas Halan, Senior Vice President, Corporate Finance, Moody's Investors Service, said: "Government of India's increase in petrol and diesel taxes by USD 21/barrel and USD 27/ barrel respectively will result in government's tax collection increasing by about USD 21 billion if the tax hike is maintained for the full year."This reinforces the importance of oil marketing companies to the government of India and validates the support incorporated in our credit assessment of these companies. The tax hike could result in higher working capital outflow for the oil marketing companies, which will partly offset the working capital savings from lower inventory costs."According to a notification issued by the Central Board of Indirect Taxes and Customs, special additional excise duty on petrol has been hiked by Rs 2 per litre and road cess has been hiked by Rs 8 a litre. In case of diesel, special additional excise duty has been hiked by Rs 5 per litre and road cess has been raised by Rs 8 a litre.With this, the total incidence of excise duty on petrol has risen to Rs 32.98 per litre and that on diesel to Rs 31.83.Petrol costs Rs 71.26 a litre in Delhi and a litre of diesel comes for Rs 69.39.Central excise duty makes up for 46 per cent of petrol and diesel price now. After considering local sales tax or VAT, the total tax incidence in the price is as high as 60 per cent.The excise tax on petrol was Rs 9.48 per litre when the Narendra Modi government took office in 2014 and that on diesel was Rs 3.56 a litre.The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.In all, duty on petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government's excise mop up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.It cut excise duty by Rs 2 in October 2017 and by Rs 1.50 a year later. But, it raised excise duty by Rs 2 per litre in July 2019.It again raised excise duty on March 14 by Rs 3 per litre.Government sources said the Centre has taken this step of increasing duty to raise some revenue in view of a tight fiscal situation. This would help in generating the resources to meet the expense of coronavirus fight as well as meet other spending needs such as on infrastructure. ANZ BAL

Central govt to get Rs 1.6 lakh cr from record excise duty hike on petrol, diesel

In a bid to make Indians adopt <a href="http://www.businessinsider.in/searchresult.cms?query=cashless+transactions&amp;sortorder=effectivedate">cashless transactions</a>, it is believed in the upcoming <a href="http://www.businessinsider.in/searchresult.cms?query=Union+Budget&amp;sortorder=effectivedate">Union Budget</a> 2017, the government will offer incentives to companies which manufacture equipment like <a href="http://www.businessinsider.in/searchresult.cms?query=PoS+machines&amp;sortorder=effectivedate">PoS machines</a> and <a href="http://www.businessinsider.in/searchresult.cms?query=micro+ATMs&amp;sortorder=effectivedate">micro ATMs</a>. 
 
As per several reports, the government is looking forward to reduce excise duty on manufacturing of micro ATMs, <a href="http://www.businessinsider.in/searchresult.cms?query=finger+print+readers&amp;sortorder=effectivedate">finger print readers</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=biometric+cards&amp;sortorder=effectivedate">biometric cards</a> and <a href="http://www.businessinsider.in/searchresult.cms?query=PIN+cards&amp;sortorder=effectivedate">PIN cards</a>. Also, import duty might also be reduced on components used in the manufacturing of micro ATMs and excise duty exemption given by the government on these machines may be further extended. Currently, the government has announced excise duty exemptions till March 31, 2017. 
 The 'Committee on Digital Payments', headed by former finance secretary <keyword id="346971" type="PERSON" weightage="20" keywordseo="RATAN-P-WATAL">Ratan P Watal</keyword>, had suggested incentives to encourage digital payments in India. The committee has suggested withdrawal of all charges levied by government departments and utilities on digital payments and bear the cost of such transactions and mandate government departments and agencies to provide option to consumers to pay digitally. 
 
Currently India is dependent heavily on import of these items.

Budget 2017: Tax sops for domestic manufacturers of PoS machines, micro ATMs on the anvil

New Delhi, Mar 23 () Finance Minister Nirmala Sitharaman on Monday took authorisation to raise excise duty on petrol and diesel by Rs 8 per litre each in future as Parliament passed the Finance Bill, 2020, that also allowed pension funds to be treated like sovereign wealth funds. First, the Lok Sabha passed the Finance Bill, 2020, without a discussion and then the Rajya Sabha returned it without a discussion, all in a matter of few hours. The Rajya Sabha also returned without debate the Appropriation Bill 2020-21, authorising the government to draw over Rs 110 lakh crore from the Consolidated Fund of India for its working as well as the implementation of its programmes and schemes. Last week, the Lok Sabha passed the demands for grants. With this, the Parliament approval of the Budget for 2020-21 has been completed. Among the amendments to the Finance Bill, 2020, that Sitharaman introduced and got the approval of included changes to make NRI-owned business being made liable to pay taxes on income generated by Indian operations only. Also, a 20 per cent TDS rate for the dividend paid to NRI/foreign company was approved. Also, REITS was exempt from dividend tax. The key change in the Finance Bill was an amendment to the law to give the government enabling powers to raise excise duty on petrol and diesel by Rs 8 per litre each in future. Sitharaman moved an amendment to the Finance Bill, 2020, to raise the limit up to which the government can raise special excise duty on petrol and diesel to Rs 18 per litre and Rs 12 per litre, respectively. This was along with other amendments as also the Finance Bill was passed without debate. The government had on March 14 raised excise duty on petrol and diesel by Rs 3 per litre each to raise an additional Rs 39,000 crore in revenue annually. This duty hike included Rs 2 a litre increase in special additional excise duty and Re 1 in road and infrastructure cess. This hike took the special additional excise duty to maximum permissible limit in law -- Rs 10 in case of petrol and Rs 4 in case of diesel. Now, through an amendment to the Eighth Schedule of the Finance Act, this limit has been increased to Rs 18 per litre in case of petrol and Rs 12 in case of diesel. This is an enabling provision and no change in excise duty is being done as of now, an official said. The amendment gives powers to the government to raise the duty by up to Rs 8 per litre in petrol and diesel at any time it wishes. The excise duty hike of March 14 was done to take away gains arising from a slump in international oil prices. According to a notification issued by the Central Board of Indirect Taxes and Customs, special excise duty on petrol was hiked by Rs 2 to Rs 8 per litre in case of petrol and to Rs 4 a litre from Rs 2 in case of diesel. Additionally, road cess was raised by Re 1 per litre each on petrol and diesel to Rs 10. With this, the total incidence of excise duty on petrol has risen to Rs 22.98 per litre and that on diesel to Rs 18.83. The tax on petrol was Rs 9.48 per litre when the Modi government took office in 2014 and that on diesel was Rs 3.56 a litre. The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices. In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped the government's excise mop-up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15. It cut excise duty by Rs 2 in October 2017 and by Rs 1.50 a year later. But, it raised excise duty by Rs 2 per litre in July 2019. ANZ HRS

Govt gets nod to raise excise duty on petro, diesel by Rs 8 in future; Parl approves Finance Bill

<keyword id="6356916" type="UNKNOWN" weightage="100" keywordseo="excise-duty">Excise duty</keyword> on branded and unbranded <keyword id="6367091" type="ORGANIZATION" weightage="60" keywordseo="Petrol">petrol</keyword> and <keyword id="6356109" type="COMPANY" weightage="60" keywordseo="diesel">diesel</keyword> has been increased by Rs 2 per litre. "Govt has decided to increase basic excise duty on petrol &amp; diesel by Rs 2/litre for infrastructure development, especially building15000 km of road," Oil Minister <keyword id="197418" type="PERSON" weightage="100" keywordseo="Dharmendra-Pradhan">Dharmendra Pradhan</keyword> tweeted. The increase in rates will come into effect from midnight. 
 
"However, retail price of petrol &amp; diesel will remain unchanged all over India despite additional excise duty of Rs 2/litre from midnight today," the oil minister said in another tweet. 
 
A fortnightly revision of petrol and diesel prices, which was due, will not happen now due to this increase. A reduction in prices was likely to happen because of fall in crude oil prices globally. 
 
On December 2 last year, the government had increased excise duty on petrol by Rs 2.25 per litre and on diesel by Re 1 per litre. 
 
The unprecedented decline in crude oil prices has come as a blessing for the Narendra Modi government and it is helping the government increase its revenue from the fuel sale. In the past, heavy subsidies on fuel used to be a burden on the government.

Excise Duty On Petrol And Diesel Increased By Rs
2/Litre

<ul><li>The Indian government has reduced the <keyword id="6356916" type="UNKNOWN" weightage="20" keywordseo="excise-duty">excise duty</keyword> on <keyword id="31907" type="COMPANY" weightage="20" keywordseo="Aviation">aviation</keyword> turbine fuel from 14% to 11%, effective 11 October. </li><li>The move is meant as a boost for the aviation sector, which has been struggling with high fuel prices and an inability to pass on higher costs to consumers due to heavy competition in the sector. </li><li>However, the cut will be offset by the recent imposition of a basic customs duty of 5% on <keyword id="59783" type="PERSON" weightage="20" keywordseo="Jet-fuel">jet fuel</keyword> as part of the government’s attempts to reduce its trade deficit. </li></ul>India’s aviation sector hasn’t had an easy go of it this year. The losses have been mounting as fuel prices have shot up and the rupee has plummeted. This hasn’t been counterbalanced by an equivalent rise in airfare owing to heavy competition in the industry. In fact, according to CAPA, a consultancy, domestic <keyword id="44023" type="ORGANIZATION" weightage="20" keywordseo="airlines">airlines</keyword> are set to lose nearly $2 billion in 2018-19 owing to rising fuel costs. In response to the sector’s woes, India’s aviation ministry was said to be mulling <a href="https://www.businessinsider.in/the-indian-government-is-planning-a-rescue-package-for-the-aviation-sector-as-the-losses-pile-up/articleshow/65681289.cms">a rescue programme</a> for the nation’s struggling airlines by reducing the burden of aviation turbine fuel expenses as well as rupee pressures. It seems that the first part of that package is kicking in. Yesterday, a week after aviation turbine fuel prices reached <a href="http://www.uniindia.com/air-travel-to-get-costlier-as-aviation-fuel-price-rises/business-economy/news/1367075.html">their highest level since January 2014</a>, the revenue department of the Ministry of Finance said in a notification that the excise duty on aviation turbine fuel would be cut from 14% to 11%, effective 11 October. Aviation turbine fuel costs reportedly comprise <a href="https://www.livemint.com/Companies/spaKGpuoVHBoXGSXtDwtlN/Indianeeds-to-reduce-taxes-levied-on-aviation-sector-IATA.html">a third</a> of operational expenses of airlines. The move follows <a href="https://economictimes.indiatimes.com/industry/energy/oil-gas/government-gives-relief-of-rs-2-50-per-litre-on-petrol-diesel/articleshow/66068736.cms">a ₹2.50 per litre cut</a> in the excise duty on retail prices of petrol and diesel on 5 October. Aviation turbine fuel had been charged an excise duty <a href="https://www.livemint.com/Politics/TPhLGiz3cRxOmABTYZyuqM/Air-India-plans-hedging-fuel-costs-up-to-25.html">of 8%</a> as recently as a few years ago However, the government decided to hike the duty to 14% in 2016 as its tax revenues were declining amid a freefall in global oil prices. While it is envisioned as a boost for the sector, the recent excise duty cut can also be seen as a ploy by the current government to curry favour ahead of important state elections in Rajasthan and Madhya Pradesh by keeping airfare at manageable levels. However, the cut might not be as effective as intended. It will be offset by the recent imposition of a basic customs duty of 5% on aviation turbine fuel. At the end of September, the Indian government hiked import duties on 19 products in a bid to reduce its growing trade deficit. So in essence,unless state governments reduce the VAT on jet fuel, the duties will just cancel each other out, resulting in a zero-sum game.

India gives its airlines a breather by cutting duties on jet fuel

With the arrival of new stable government, <keyword id="6355261" type="POSITION" weightage="60" keywordseo="Finance-minister">Finance Minister</keyword> <keyword id="42575" type="PERSON" weightage="60" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> is all set to present the <keyword id="6360189" type="COMPANY" weightage="80" keywordseo="Union-Budget">Union Budget</keyword> 2015-16. Since it is the <keyword id="6360789" type="ORGANIZATION" weightage="80" keywordseo="Modi-Government">Modi government</keyword>’s first full-term budget and they already have promised a transformational budget, expectations are high on decisions to be taken for any sector of the country and automotive sector is no different. Here is AutoPortal’s take on the automobile industry and the budget impact on it. 
 
With the increasing growth in demand on back of rising income, expanding middle class and young population base, in addition to a large pool of skilled manpower and growing technology, will propel India to be among the world's top five auto-producers by 2015. 
 A report published by Delloite says, “India is expected to become a major automobile manufacturing hub and the third largest market for automobiles by 2020”. The automotive industry in India accounts for around 22% of the country's manufacturing gross domestic product (<keyword id="35050" type="CITY" weightage="60" keywordseo="gdp">GDP</keyword>) and is one of the largest employment creators of the <keyword id="34412" type="ORGANIZATION" weightage="60" keywordseo="economy">economy</keyword>. 
 
However, sales of passenger vehicles in the domestic market grew just 3.67% in the April-December period (mainly after the excise cuts) this fiscal in comparison with the same period a year ago and the industry went through slowdown for most of last year. 
 The situation got worsen in January 2015, after the withdrawal of <keyword id="6356916" type="UNKNOWN" weightage="60" keywordseo="excise-duty">excise duty</keyword> concessions, car sales in India witnessed major decline with main players <keyword id="44883" type="CITY" weightage="80" keywordseo="Maruti-Suzuki">Maruti Suzuki</keyword> and <keyword id="596" type="CITY" weightage="80" keywordseo="Hyundai">Hyundai</keyword> posting single digit growth in January, while others like <keyword id="121834" type="COMPANY" weightage="80" keywordseo="GM-India">GM India</keyword> and Ford saw decline in sales. 
AutoPortal’s outlook on the upcoming budget over automobile industry is: 
 
· Reduction in excise duty: In February 2014 interim budget, excise duty on small cars, scooters, motorcycles and commercial vehicles was reduced to 8% from 12% previously. For SUVs, it was cut to 24% from 30%; for mid-sized cars, to 20% from 24%, and to 24% for large cars from 27% earlier, in the hope of boosting the sector. In June2014, the new government led by Prime Minister <keyword id="6354477" type="PERSON" weightage="80" keywordseo="Narendra-Modi">Narendra Modi</keyword> extended the excise duty concessions till December 2014. As a result, auto manufacturers were forced to increase prices. The auto industry SIAM, further wants to extend the relaxation in duties as this would keep the cost of ownership down for the ultimate owners and increase the interest for new buys. Further, long-term stability in excise duty structure is needed across the country, so that manufacturers can plan their products strategy for the next 3-5 years. 
 
· Inverted duty structure: The government is expected to address the inverted duty structure in the forthcoming Budget. Under the inverted duty structure, taxation of inputs is at higher rates than finished products that results in build-up of credits and cascading costs, thus favouring imports of raw material. Under the government’s “Make in India” approach, it is suggested to remove inverted duty structure to protect the interests of domestic industry. 
 
· Implementation of <keyword id="6354679" type="ORGANIZATION" weightage="60" keywordseo="GST">GST</keyword>: Implementation and speedy action on GST will bring in growth to the economy and create a uniform tax structure across all states. Also this will persuade more exports through increased competitiveness in the international market. The auto industry is keenly looking forward to the roadmap and introduction of GST. 
 
· Scrappage Subsidy Schemes: Introduction of Scrappage Subsidy Schemes on lines of European counterparts, which will clean old cars off the road. Budget should include Policy for scrapping old cars- 15 years and above, along with the infrastructure needed to scrap. This will benefit the environment, reduce fuel consumption and also propel further demands for automotives. 
 
· Green initiatives to manufacturing of electric and hybrid cars: With the upcoming budget, Green initiatives from the government to boost sale of electric and hybrid vehicles is expected and also needed as ‘Go Green’ is the motto for all leading economies of the world. The government is expected to announce special tax incentives to promote eco-friendly vehicles and provide more sops for hybrid/ alternative fuel for vehicles, to increase the marketability and usage of these vehicles and to improve environment and economy by bringing down fuel imports. Continuation of the tax incentives from the Budget for 2014-15 like investment allowance and duty cuts for hybrid vehicles/ parts is also expected. 
 
Electric cars are an eco-friendly variant of four-wheelers. But these cars need to be charged regularly which requires a particular infrastructure (charging locations) across the country. The auto sector needs the government to help setup the charging infrastructure across cities. 
 
· Custom duty unchanged for exported cars: Fully imported cars attract a customs duty in excess of 125%. To promote “Make in India” and to provide healthy competitive platform to domestic players, the auto industry hopes that the budget will retain the customs duty at the current rate which ultimately increases the cost of imported cars. 
 
· Lowering of interest rates for financing vehicles: According to a Business World report, “Over 80% of the vehicles purchased in India are purchased with financing from banks and other institutes”. Thus, a reduction in bank <keyword id="37018" type="UNKNOWN" weightage="80" keywordseo="interest-rate">interest rate</keyword> on loans will overall reduce the cost for the consumer, ultimately improving the demand for the automobiles. 
 
Before it is too late and the auto industry is back to the days of poor demand and high taxes, it needs a big push from the upcoming Budget to be back on a growth trajectory. In the wake of the government's 'Make in India' and big expectations from the upcoming budget, Indian auto industry shall witness an unprecedented sales and demand growth. 
 
About the author: This article has been authored by Sagar Das, head-<a href="http://autoportal.com/">Autoportal.com</a>, ex-India dot com Product Management &amp; business of OnCars. 
 
Image source: Autoportal

Budget 2015: Auto sector demands tax sops

New Delhi, Jan 23 () Mondelez India Foods Private Limited, manufacturer of Cadbury chocolates, has paid over Rs 400 crore to settle a tax dispute involving an alleged phantom unit in India, officials said on Thursday.
The Directorate General of Central Excise Intelligence (DGCEI) had in 2011 initiated a probe against the company for allegedly misusing "area-based exemption" for a new unit in Baddi in Himachal Pradesh to avail excise duty benefits, even before it came into existence, they said.
The DGCEI is now known as the Directorate General of Goods and Services Tax Intelligence (DGGSTI). 
The "area-based exemption" for new units of firms in Himachal Pradesh provides full exemption from excise duties for production of specific goods for 10 years, as per norms.
However, for availing the exemption, the unit should have been established before March 2010.
The officials said a demand of about Rs 580 crore was raised against Mondelez India Foods Private Limited, erstwhile Cadbury India Limited, following the probe.
The firm has paid Rs 439 crore under the Centre's 'Sabka Vishwas' Legacy Dispute Resolution Scheme to settle the amount of tax and penalty, they said.
When contacted, a Mondelez India spokesperson told : "We continue to believe that the decision to claim an excise tax benefit in respect of our plant in Baddi was valid."
However, the matter relates back to 2010, and it could take several more years to be resolved through the legal process, the spokesperson said in a statement.
"The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, introduced by the Indian government in 2019, was an opportunity to settle a potentially protracted litigation. 
"Like other tax payers, Mondelez India chose to take advantage of the amnesty, and we settled several legacy disputes including the Baddi matter," it said.
The decision to take advantage of the tax amnesty was made in the interest of putting an end to the issue so that "we can focus on what we do best, our purpose of empowering people to snack right," the statement said. 
India is a key market for Mondelez International and "we will continue to prioritise growing our business here", it said.
During investigation, DGCEI officials allegedly found that Mondelez India had claimed excise duty exemption for its new unit in Sandoli village in Baddi relating to a period even before it came into existence, the officials said. AKV ANB
ANB

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