Excise Duty Changes in Budget 2016-17

The Budget 2016-17 marked the development of numerous changes within the existing rate of Excise duty. There were some areas where the existing rate of excise duty was lowered and then there were some areas where the existing rate of excise duty was increased. Additionally, there were also some section which were brought under the purview of excise duty. For a common, here is the complete information on the changes in the excise duty after Budget 2016-17.

Goods On Which Excise Duty Was Introduced

  • Articles of jewellery have been exempted, apart from Silver, if not studded with diamond/ other stones such as sapphire, ruby or emerald, withdrawn at the maximum limit of INR 6 crore during a particular financial year (FY); provided the same had an eligibility limit worth INR 12 crore in the preceding FY will be charged at 1%. Previously, the same was exempted. If there is any ITC (input tax credit), then the rate would be readjusted to 12%.
  • Branded garments, whose retail price is either equal to or greater than INR 1,000 will now be required to pay excise duty @ 2% (if there is no ITC). However, there is any ITC, then rate would be readjusted to 12.5%.

Goods On Which Excise Duty Was Increased

  • Tobacco related products such as cigarettes, cigar, etc., have witnessed an increase in the rate excise duty. The earlier rate was 10% and the new rate has been fixed at 15%. However, the new rate is not applicable to beedi.
  • Domestic manufacturer and suppliers of mobile phone products such as mobile phone charger, headsets, batteries, speakers, etc., are now required to pay 2% excise duty on the production, if there is no ITC. Presence of ITC would require a payment of 12.5% excise duty.
  • Production of products such as broadband modems, routers, set-top boxes, CCTV camera and other similar products will now attract an excise duty ranging from 12.5% to 4%, if paid without ITC. Incase, of ITC, the rate would be revised to 12.5%. 

Goods On Which Excise Duty Was Decreased

  • Production of Smokeless Chulhas, or improved chulhas have been exempted from payment of excise duty. Earlier, there was an applicable excise duty on the same, but witnessing the need of the nation, the same has been withdrawn.
  • Products such as electrically operated shafts, washer, centrifugal pump, etc., will now need to pay an excise duty of 6% in cases where about 50% of such products are used for facilitating agriculture.
  • The excise duty on refrigerator containers has been reduced 6%. Earlier it was 12.5%.
  • Production of micronutrients, as defined under Fertilizer Control Order 1985, now need to pay an excise duty of 6% as compared to the earlier rate of 12.5%.
  • Physical mixing of fertilizers which includes duty paid chemical fertilizers, produced by manufacturers whose name is registered under Fertilizer Control Order 1985, are now exempt from payment of excise duty. If the case includes ITC, then the applicable rate would be 6%.
  • Production of Solar Lamp will no longer attract any excise duty. Earlier the rate was 12.5%.
  • Other items as specifically mentioned under specified Industrial Units.

Thus, we find that there were numerous area where excise duty was introduced during the budget 2015-16 and there were also some areas which were relieved from payment of excise duty. The intention of the Government behind this step is to create a balance between product developments in India. If you have any questions, feel to ask us the same through the comment section. We’ll be glad to hear from you and answer the same.

Download Finance Bill 2016, Budget 2016-17 Speech & Highlights in English & Hindi

1 Comment

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  1. Muralitharan RC

    There is no increase in individual income exemptions on filing of income could be consider, such as education, insurance and housing interests etc.,

    Muralitharan RC

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