Applicability -
- On Production of goods
- On import of goods
- On services ( no rates have been prescribed in the schedule)
Rates -
As mentioned in the schedule.
Valuation for excise duty -
| On Production of Goods | Ex-Factory Price - (COP + Profit without adding any taxes). If IRD has determined such price then according to such price. |
| On Services | Invoice Price. If IRD has determined such price then according to such price |
| Import of Excisable Goods | Value for customs + Custom Duty |
| Reference Price | Excise officer may fix the price |
IRD may carry out additional reassessment if necessary. if done so, then price re-assessed as such shall be the value for levying excise
Point of levy of Excise -
| Physical Control System | at the time of issuance after production for the purpose of sale |
| Self-Removal System | Issuance of Invoice |
| Import of Goods | Entry Point at the time of import |
| Import of services | Prescribed by IRD |
Time to deposit Excise -
| Physical Control System | at the time of issuance |
| Self-Removal System | 25th of following month of issuance of invoice. |
| Import of Goods | At the time of import |
| Import of services | Prescribed by IRD |
Person Liable to Pay Excise -
| Domestic Production | Manufacturer |
| Supply of service | Provider |
| Import of Goods | 1. Person whose name is mentioned in Bill of Lading, Airway bill, invoice or, 2. Person mentioned in application for clearance |
| Auction | Person who wins such auction |
| Goods bought from a Duty Free Shop and Resold other than liquor and cigarette (Because goods sold to DFS are not subject to excise) | Person re-selling it |
| Conversion of Non-Excisable to Excisable | Person with ownership |
| Other Cases | As prescribed by IRD |
Exemptions -
| Exemptions | Conditions |
| Not Listed in Schedule of Excise law | -- |
| If goods are produced for Export | -- |
| Sales to DFS other than liquor and cigarette | -- |
| Sales By Bonded Warehouse other than liquor and cigarette | -- |
| Import Under Diplomatic Facility by a person enjoying such facility | Recommendation of MOFA |
| Conversion of Motor Vehicle imported under diplomatic privilege into governmental vehicle under approved annual program of project. | Imported by Diplomatic mission or donor agency under diplomatic privilege and less than 10 years old since the first year of manufacturing. Transferred in the name of the project and conversion is as per approved annual program of the project |
| Transfer of vehicle to Local body, Governmental body, Community school, community hospital imported under full or partial duty privilege | Less than 10 years old since the year of manufacturing, transferred in the name of such body, transfer only after completion of project and approval of MOF, GON |
| Scrapping of Motor Vehicle imported by diplomatic agency, project, person, and other body under duty privilege | Cancellation of registration of vehicle, Approval of MOF, Cannot be re-used, 15+ years older from the year of its manufacturing |
| Transfer of vehicle imported under partial custom duty facility for personal purpose to spouse | -- |
| Asset required by Security Agencies under peace keeping mission | on the request of UN |
| Production of Goods using 90% or more of Local Scrap | -- |
License -
| SN | Goods | System | Excise Levied | License Required | Renewal Required |
| 1 | Liquor and Liquor based Product | Physical Control System | on Production and import. | For Production, import and Trading/Storing | Yes |
| 2 | Tobacco Related Product | Self Issuance System | on Production and import | For Production, import and Trading/Storing | Yes |
| 3 | Other Excisable Goods and Services | Self Issuance System | on Production and Import | For Production, import only. Not required for trading or Storing | No |
Input Credit -
| Physical Control System | Excise duty on raw material can be offset from excise duty at the time of issuance |
| Self Issuance system | Excise duty on purchase of raw material can be offset from excise duty at the time of self-issuance |
| Supporting Raw material and packing material | Credit Not Available |
| Lost due to fire, theft, accident | credit of excise duty paid on such raw materials can be claimed |
if excise duty could not be set off, application may be made to excise officer for refund. in case of export of tobacco and liquor based product and paan masala, claim can be made only if there is 15% value addition. The claim has to be made within 1 year from the date of expiry of submission of tax return
Other important points to remember
- Hotels and party palaces may transact in liquor and tobacco only with other goods.
- Departmental store may transact in liquor and tobacco along with other goods by maintaining a separate section.
- Other license holders cannot transact liquor and tobacco with other goods.
- Liquor industry, beer industry, cigarette industry or their importer cannot operate any time of gift schemes. Also, they cannot provide rebates to other distributors.
- No excise duty on Ambulances. (No custom Duty too on the import of ambulances as specified by MOH)
Published By
Aadesh Kandel
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