Draft Central Excise Bill 2024| UPSC Current Affairs

Description

Disclaimer: Copyright infringement not intended.

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 This draft aims to enact a comprehensive modern central excise law, promote ease of doing business, and repeal outdated provisions.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Removal of Outdated Provisions: The bill aims to eliminate outdated and redundant provisions following the introduction of the Goods and Services Tax (GST).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