Staff Reporter | 02 Jul, 2008
Till July 1 an optional scheme existed for payment of excise duty on the basis of compounded levy for Pan Masala and Gutkha.
However with effect from July 1 the Government has notified mandatory scheme of payment of excise duty based on capacity of production for pan masala, whether or not containing tobacco, manufactured with the aid of packing machine and put up in pouches.
The scheme is not applicable to pan masala, not containing tobacco, with betel nut content not exceeding 15% and pan masala containing tobacco or gutkha, packed manually or put up in a form of packing other than pouches e.g. tin packs.
The notification as published in the CBEC website:
GOVERNMENT
OF INDIA
MINISTRY
OF FINANCE
(DEPARTMENT
OF REVENUE)
Notification
No. 42/2008-Central Excise
New
Delhi, the 1st July, 2008
G.S.R.
(E)
In exercise of the powers
conferred by sub-section (3) of section 3A of the Central Excise Act, 1944, the
Central Government hereby specifies on, -
(i) pan masala falling under
tariff item 2106 90 20 of the First Schedule to the Central Excise Tariff Act,
1985 (5 of 1986) except the pan masala containing
not more than 15% betel nut; and
(ii)
pan masala containing tobacco,
commonly known as gutkha, falling under tariff item 2403 99 90 of the said
Tariff Act (hereinafter referred to as specified goods),
manufactured
with the aid of packing machine and packed in pouches having retail sale prices
as specified in column (2) of Table-1 below, the rates of duty specified in the
corresponding entry in column (3) or column(4) of the said Table, as the case
may be:
Table-1
S.
No.
|
Retail
sale price (per pouch)
|
Rate
of duty per packing machine per month
(Rs.
in lakh)
|
|
|
Pan
masala
|
Pan
masala containing tobacco
|
|
|
|
|
(1)
|
(2)
|
(3)
|
(4)
|
1.
|
Up
to Rs. 1.00
|
9.25
|
12.50
|
2.
|
From
Rs. 1.01 to Rs. 1.50
|
14
|
19
|
3.
|
From
Rs. 1.51 to Rs. 2.00
|
18
|
24
|
4.
|
From
Rs. 2.01 to Rs. 3.00
|
26
|
36
|
5.
|
From
Rs. 3.01 to Rs. 4.00
|
34
|
47
|
6.
|
From
Rs. 4.01 to Rs. 5.00
|
43
|
59
|
7.
|
From
Rs. 5.01 to Rs. 6.00
|
51
|
70
|
8.
|
Above
Rs.6.00
|
50
+ 8.36
* (P - 6),
where
P represents retail sale price of the pouch
|
69
+ 11.45 * (P - 6), where P represents retail sale price of the
pouch
|
Illustration: The
rate of duty per packing machine per month for a gutkha pouch having retail sale
price of Rs. 8.00 (i.e. âPâ) shall be =
Rs. 69 + 11.45*(8-6) lakhs
= Rs. 91.90 lakhs
Explanation
1: For
the purposes of this notification, âpacking machineâ includes all types of
Form, Fill and Seal (FFS) machines and Profile Pouch Making Machine, by whatever
names called, whether vertical or horizontal, with or without collar,
single-track or multi-track, and any other type of packing machine used for
packing of pouches of notified goods.
Explanation
2: For
the purposes of this notification, if there are multiple track or multiple line
packing machine which besides packing the specified goods in pouches, perform
additional processes involving moulding and giving a definite shape to such
pouches with a view to distinguish the brand or to prevent the counterfeiting of
the goods, etc., two such tracks or lines shall be deemed to be one
individual packing machine for the purposes of calculation of the duty
liability.
Explanation
3: For
the purposes of this notification, âretail
sale priceâ means the maximum price at which the specified goods in packaged
form may be sold to the ultimate consumer and includes all taxes, local or
otherwise, freight, transport charges, commission payable to dealers, and all
charges towards advertisement, delivery, packing, forwarding and the like and
the price is the sole consideration for the sale:
Provided
that where on the package, more than one retail sale price is declared, the
maximum of such retail sale prices shall be deemed to be the retail sale price:
Provided
further that if the goods are cleared in wholesale packages containing a number
of standard packages with retail sale price declared on them, then, such
declared retail sale price shall be taken into consideration for determining the
rate of duty under respective S. Nos. referred to in Table-1.
2. The number of packing machines, for the purpose of computation of the
rate of excise duty specified in the opening paragraph shall be determined in
terms of Pan Masala Packing Machines (Capacity Determination and Collection of
Duty) Rules, 2008.
3. The duty levied and collected on such specified goods shall be the
aggregate of the duty leviable under the Central Excise Act, 1944 (1 of 1944),
the additional duty of excise leviable under section 85 of the Finance Act, 2005
(18 of 2005), the National Calamity Contingent Duty leviable under section 136
of the Finance Act, 2001 (14 of 2001), Education Cess leviable under section 91
of the Finance Act, 2004 (23 of 2004) and Secondary and Higher Education Cess
leviable under section 136 of the Finance Act, 2007 (22 of 2007) and shall be
apportioned in the ratios specified in the Table-2 below.
Table-2
Sr.
No.
|
Duty
|
Duty
ratio for pan masala
|
Duty
ratio for pan masala containing tobacco
|
(1)
|
(2)
|
(3)
|
(4)
|
1
|
The
duty leviable under the Central Excise Act, 1944
|
0.3161
|
0.7355
|
2
|
The
additional duty of excise leviable under section 85 of the Finance Act,
2005
|
0.1355
|
0.0883
|
3
|
National
Calamity Contingent Duty leviable under section 136 of the Finance Act,
2001
|
0.5193
|
0.1471
|
4
|
Education
Cess leviable under section 91 of the Finance Act, 2004
|
0.0194
|
0.0194
|
5
|
Secondary
and Higher Education Cess leviable under section 136 of the Finance Act,
2007
|
0.0097
|
0.0097
|