Excise duty

Subject: Economy

Context: Rising oil prices has led to demand for reduction in excise duty by the Central government.

Concept:

Excise duty is a form of indirect tax paid to the Government of India imposed on goods for their production, licensing and sale.
Unlike this custom duty levied on those coming from outside of the country.
At the central level, excise duty earlier used to be levied as Central Excise Duty, Additional Excise Duty, etc. However, the Goods and Services Tax (GST), introduction in July 2017, subsumed many types of excise duty. Today, excise duty applies only on petroleum and liquor.

Types of excise duty in India (before GST was implemented)

Basic Excise Duty: Also known as the Central Value Added Tax (CENVAT) it was levied on goods that were classified under the first schedule of the Central Excise Tariff Act, 1985. This duty was levied under Section 3 (1) (a) of the Central Excise Act, 1944. This duty applied on all goods except salt.
Additional Excise Duty: Additional excise duty was levied on goods of high importance, under the Additional Excise under Additional Duties of Excise (Goods of Special Importance) Act, 1957. This duty was levied on some special category of goods.
Special Excise Duty: This type of excise duty was levied on special goods classified under the Second Schedule to the Central Excise Tariff Act, 1985.