Draft ‘Central Excise Bill, 2024’

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Context

• The Central Board of Indirect Taxes & Customs has invited suggestions on the draft ‘Central Excise Bill, 2024’. This draft aims to enact a comprehensive modern central excise law, promote ease of doing business, and repeal outdated provisions.

Main Aim of the Bill

• Removal of Outdated Provisions: The bill aims to eliminate outdated and redundant provisions following the introduction of the Goods and Services Tax (GST).
• Alignment with GST: Aligns excise duty provisions with GST legislation, addressing long-standing demands from industry players.

Structure of the Bill

• Chapters and Sections: Comprises twelve chapters, 114 sections, and two schedules.
• Stakeholder Feedback: Comments on the bill are invited by June 26.
• Replacement of Old Act: Will replace the Central Excise Act, 1944.

Expert Opinions

• Modernising Tax Framework: Director – Indirect Tax, Nangia Andersen India, highlights the bill as a critical step towards modernising India’s tax framework to align with the current economic environment and GST legislation.
• Limited Applicability: The bill focuses on specific goods like certain tobacco and petroleum products, acknowledging the limited applicability due to most goods being exempt under GST since 2017 (Brijesh Kothary, Partner, Khaitan & Co).

Key Provisions and Changes

• Resolution of Disputes: Aims to resolve past and ongoing disputes, granting the government powers to extend time limits under special circumstances (force majeure) or pass orders to remove difficulties.
• Incorporation of CENVAT Credit: The concept of CENVAT Credit is proposed to be integrated into the new bill.
• Concept of ‘Related Persons’: Borrowed from customs law.
• Refund and Demand Limitations:
• Refund claims by assessees: Reduced from 2 years to 1 year.
• Departmental authorities' time to raise demands: Extended to 3 years.

CENVAT Credit CENVAT credit refers to the set-off available to manufacturers if they utilise some specific inputs for manufacturing their products. A manufacturer can claim CENVAT credit on the following cases: Excise duty on a final product: For manufacturers and producers of final products Service tax on output services: For providers of taxable and exempted services Inputs and capital goods: If these goods are being partially processed

Additional Information

• Digitisation of GST Appeal Process: The GST appeal process will be fully digitised, enhancing the ease of compliance and resolution.

PRACTICE QUESTION Q. With reference to CENVAT Credit, consider the following statements: 1.    CENVAT credit allows manufacturers to set off excise duty on the final product. 2.    Service providers can claim CENVAT credit on service tax for both taxable and exempted services. 3.    CENVAT credit can be claimed on inputs and capital goods, even if these goods are partially processed. Which of the statements given above is/are correct? a) 1 and 2 only b) 2 and 3 only c) 1 and 3 only d) 1, 2 and 3 Answer: d) 1, 2 and 3

SOURCE: FINANCIAL EXPRESS