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Central Board of Excise and Customs Research Team | Posted On Monday, November 19,2018, 06:18 PM

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Central Board of Excise and Customs



What is central board of excise and customs?

Central Board of Excise and Customs (CBEC) is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks policy formulation concerning levy and collection of Customs and Central Excise duties, prevention of smuggling and administration of matters relating to Customs, Central Excise and Narcotics to the extent under CBEC's purview. The Board is the administrative authority for its subordinate organizations, including Custom Houses, Central Excise Commission rates and the Central Revenues Control Laboratory.

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Central board of excise and custom functions:

The important Customs related functions include the following:

  • Collection of Customs duties on imports and exports as per the Customs Act, 1962 and the Customs Tariff Act, 1975
  • Enforcement of various provisions of the Customs Act, 1962 governing imports and exports of cargo, baggage, postal articles and arrival and departure of vessels, aircrafts and so on.
  • Discharge of agency functions and enforcing prohibitions and restrictions on imports and exports under various legal enactments.
  • Prevention of smuggling including interdiction of narcotics/drug trafficking.
  •  International passenger clearance.
  • Customs functions cover substantial areas of activities involving international passengers, general public, importers, exporters, traders, custodians, manufacturers, carriers, port and airport authorities, postal authorities and various other Government and semi-Government agencies/banks.
  • Customs are continuously rationalizing and modernizing Customs procedures through adoption of EDI and global best practices.

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Central Excise Act:

Central Excise duty is an indirect tax levied on goods manufactured in India. Excisable goods have been defined as those which have been specified in the Central Excise Tariff Act as being subjected to the duty of excise. The word "Goods" has not been defined in the Act. Therefore, its meaning is borrowed from the constitution and from the sale of goods Act and understood as per the decisions of the apex court. Under excise, it is understood to be items that are movable, i.e. capable of being moved and marketable, i.e. capable of being sold.

Central Excise Act defines 'Manufacture' by an inclusive definition as any process incidental or ancillary to the completion of a manufactured product. Manufacture under Central Excise can be understood as a process wherein the name, characteristic and use of the input are changed or become distinct and different after the process. Thus a process which simply changes the form or size of the same article or enhances the value of the article would not constitute manufacture. Repairing or reconditioning does not constitute manufacture. Assembling would constitute manufacture.

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Types of Custom Duty

Customs duties are a kind of tax that has to be paid before importing goods from a nation. The import duties are levied on all goods that are imported into a nation, while the export duties are levied on specific goods. Listed below are the different types of customs duties:

  • Basic customs duty (BCD): The imported goods are levied with a Basic Customs Duty on the assessable value. Basic Customs Duty is a type of duty or tax imposed under the Customs Act (1962). The duty may be fixed on specific rate basis. The Central Government has the power to reduce or exempt any good from these duties.
  • Education cess: This is a tax that is levied by the government to finance the basic education in the country. The Cess is levied at 2% and an additional 1% of the aggregate of the customs duties.
  • Countervailing duty: This is a type of additional customs duty levied on goods that fall under Section 3 of the customs tariff act 1975. It is the same as central excise duty levied on smaller goods produced in India.
  • Protective duty: Protective tariffs are taxes or duties placed on foreign goods by a national or state government in order to protect domestic products and markets.
  • Safeguard duty: The safe guard duty is a type of tax aimed to safeguard the rise in exports. The safeguard taxes are levied on goods when the government feels that the rise in exports can damage the existing domestic market.
  • Anti-dumping duty: Dumping means exporting goods to a foreign market at a price which is less than their cost of production or below their "fair" market value. Dumping gives hard competition to a domestic goods manufacturer. So, to counteract this dumping, the Indian government has formulated certain guidelines and policies. Imposing duty on imported goods is also one of them and is known as Anti-Dumping Duty.

Central Excise E-Filing:

Central excise duty is an indirect tax levied on goods that are manufactured in India and are meant for home consumption. Electronic Accounting System in Excise and Service Tax (EASIEST) is a web based payment gateway launched by CBEC in 2007 enabling assesses to pay Central Excise duties and Service Tax online. It interfaces with the e-payment portals of the banks involved in tax collections and makes available accurate tax payment data from banks for revenue and tax payer accounting purposes. 

Central Excise Rate:

The central excise rates are the rates determined by the Central Board of Indirect Taxes and customs, where the rate of exchange of conversion of each of the foreign currencies are specified in schedule 1 and schedule 2 of the exchange rate notification no. 93/2018. The notification came into effect from 16th November. The rates mentioned are the rates of exchange per 100 units of foreign currency equivalent to Indian rupees.

 What does CBEC do?

The CBEC performs function with the aim to:

  • Realize the revenues in a fair, equitable and efficient manner
  • Administering the Government's economic, tariff and trade policies with a practical and pragmatic approach.
  • Facilitating trade and industry by streamlining and simplifying Customs and Excise processes and helping Indian business enhance competitiveness
  • Creating a climate for voluntary compliance by providing guidance and building mutual trust.
  • Combating revenue evasion, commercial frauds and social menace in an effective manner.

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