Central Excise Registration

Excise Duty, collected by the State Government or the Central Government, Difference from Sales Tax

Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty and is collected in terms of Section 3 of the Central Excise Act, 1944. Sales Tax is different from the Excise duty as former is a tax on the act of sale while the latter is a tax on the act of manufacture or production of goods.

Whether license from the Central Excise department is necessary
No license is required and a simple registration with the Central Excise department would suffice.

Categories of persons are required to obtain registration with the Central Excise department

Subject to specified conditions, generally the following categories of persons are required to get themselves registered with the Central Excise department:

(i) Every manufacturer of dutiable excisable goods

(ii) First and second stage dealers or importers desiring to issue Cenvatable invoices

(iii) Persons holding bonded warehouses for storing non-duty paid goods

(iv) persons who obtain excisable goods for availing end-use based exemption.

Persons who are exempt from obtaining registration
Subject to specified conditions, the following categories of persons need not obtain Central Excise registration.

(i) Manufacturers of goods which are chargeable to nil rate of duty or are fully exempt;

(ii) SSI manufacturers having annual turnover of below Rs.90 lakhs. Once their turnover touches Rs.90 lakhs, they should give the prescribed declaration to the Jurisdictional Superintendent of Central Excise;

(iii) Job-workers of ready-made garments if the principal manufacturer undertakes to discharge the duty liability;

(iv) Approved/licensed units in Export Processing Zones, Special Economic Zones and 100% Export Oriented Units.

Procedure for obtaining registration
Apply to the nearest Central Excise Division Office in Form A.1 along with a self attested copy of the PAN issued by the Income Tax Department. After post verification, a regular Registration certificate in form RC is normally issued immediately, as far as possible

Items on which Central Excise duty is leviable
All goods listed in the Central Excise Tariff Act, 1985 attract Central Excise duty unless specified to the contrary in the Act itself or under any notification issued under the Central Excise Act, 1944 by the appropriate statutory authority.

Liability to pay Central Excise duty
Generally speaking, the manufacturer who actually undertakes manufacturing activity is liable to pay Central Excise duty. A person does not become a manufacturer simply by supplying raw materials to the manufacturer or getting his goods manufactured according to his own specifications, brand name or trade name, etc. However, for the textile sector, the option is with the supplier of raw materials or with the job worker to pay duty.

Rate of duty on various category of goods
The rate of duty on each item is specified in the Central Excise Tariff Act, 1985. In some cases, the statutory rates of duty have been lowered or reduced to Nil by the Central Government in terms of Section 5A of the Central Excise Act, 1944. Anyone interested in knowing the effective rates of duty in respect of any goods must refer to the Tariff or seek guidance from the nearest Central Excise Officer, if necessary.

Exemption from payment of duty for Small Scale Industries
Generally speaking, the Small Scale Units, who manufacture the goods specified in the relevant exemption notifications and fulfil the conditions specified in such exemption notifications, are exempt from payment of duty till their aggregate clearances do not exceed Rs.1 Crore in a financial year. The Small-Scale units whose clearances in the previous financial year exceeded the limit of Rs.3 Crores, which will also include the value of exempted goods (excluding exports), are not entitled to such exemption. Generally speaking, the Small Scale units who are availing the CENVAT credit are required to pay duty at concessional rate of 60% of the prescribed rate till their clearances reach Rs.1 Crore. For further details, please consult the nearest Central Excise Range Office.

Period for filing returns by the assessee
An SSI unit is required to file returns on quarterly basis within 20 days from the date of completion of the quarter, but non-SSI units are required to file returns on monthly basis within 10 days from the date of completion of month.

Effect of non-filing of returns
A penal action is envisaged on failure to file the returns in time. Penalty may extend up to Rs.2000/-.

Payment of Central Excise duty
An SSI unit has to pay duty on monthly basis by 15th of the succeeding month. Other units are required to pay duty on monthly basis within 5 days of completion of the month in question.. The assessee is required to deposit the amount of duty payable in the nominated bank along with the prescribed TR-6 challan and on this amount being credited in the government account, he can take credit in the PLA register. Such credited amount can then be utilized for discharging the duty on goods cleared from his factory. However, for the month of March, the duty has to be paid by 31st March, both for SSI and Non SSI units. Further, in case of default in payment of duty, the interest is leviable @ 2% per month or Rs. 1000/- per day, which ever is higher, starting from the date on which the duty was required to be paid till the date of payment (subject to the interest not exceeding the duty amount.

Facility for mitigating the cascading effect of duty; CENVAT
Subject to prescribed conditions, the assessee has to obtain a duty paid invoice from the consignor and then he can take credit of such duty amount in the account maintained for this purpose and the same can be utilized by him for the payment of the duty on the goods from his factory. This credit is called CENVAT. Please consult the nearest Central Excise Range Office for further information.

Customs formality to be fulfilled at the time of export from the factory and the procedure for export of goods
The assessee is required to inform to the Superintendent/Inspector in the Range Office 24 hours in advance about the proposed consignment of export. The Central Excise officer remains present while stuffing the goods in the container. After completion of the stuffing, the container is sealed with the Central Excise seal in presence of the said officer. Necessary documents such as ARE-1, invoice, packing list are also signed by the said officer. Self-sealing facility is also available under which the assessee himself stuffs the container and take clearance thereof. For more details, please contact the nearest Central Excise Range Office.

Central Excise registration for 100% EOU
The licence granted by the jurisdictional Custom Officer under Section 58 of the Customs Act, 1962 is sufficient for 100% EOU. No separate Registration is necessary.

Benefit for 100% Export Oriented Unit get from the Central Excise
Subject to prescribed conditions, no Excise duty is payable on the capital goods, raw materials, spares, consumables, etc. procured by the 100% EOU.

Procedure to be followed for setting up a 100% EOU
On obtaining LOP from the Development Commissioner, a manufacturer is required to approach the Commissioner of Central Excise for declaration of the place as a warehousing station under Section 9 of the Customs Act. Thereafter, the manufacturer is required to obtain private bonded warehouse licence under Section 58 of the Customs Act and permission to manufacture goods under Section 65 of the Customs Act from the jurisdictional Deputy/Assistant Commissioner.

CT-3 certificate
CT-3 certificate is required to be obtained from the Range Superintendent of Central Excise on the basis of which a 100% EOU can procure duty free indigenous goods.

Periodical return to be filed by a 100% EOU
The 100% EOU is required to file monthly return in prescribed form.

Permission for 100% EOU to sell the goods in local market
Under certain circumstances, 100% EOUs are permitted by the Development Commissioner to sell the goods in the local market on payment of appropriate duty.

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