difference between exempt and nil rate of excise duty

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RAM SAINI (Querist)
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09 March 2010 Dear all

could anyone let me know that

is there any difference between

exempted goods from excise duty

and

nil rate of excise duty

Thanks& rgds

RK Saini

Rahul Gupta

Rahul Gupta (Expert)
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09 March 2010 Exempt Rate means that the goods or services are not liable to be taxed. They are not coevred in the taxable items.

However, NIL rates means that the goods or services are taxable but at Nil Rate. In case the rate increas in future by notification or so it will still remain taxable at the increased rate.

CA Pradeep Kumar Rajput

CA Pradeep Kumar Rajput (Expert)
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09 March 2010 The goods for which NIL rate of duty mention in CETA these are also called zero rated goods......

The goods which are liable for cartain % of duty in CETA but currently exempt form duty by any notification from the department these are called exempt goods. These goods liable for normal rate of duty when such exemption notification is withdrewan by the department....

And the goods which are not mention in CETA are called non excisable good and are not liable for the excise duty.....

so there is very close difference between between Exempted and Nil Rated goods

SANJAY JAIN

SANJAY JAIN (Expert)
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09 March 2010 The Section 2(d) of the Central Excise Act,1944 defines excisable goods as specified in the first/second schedule to the Central Excise Tariff Act,1985 as being subject to a duty of excise.

While exempted goods has been defined by the Rule 2(e) of the CENVAT Credit Rule,2004 as excisable goods exempted from the whole of the excise duty leviable and includes goods which are chargeable to NIL rate of duty.

The reading together of the above definition reveals that on mentioning the goods in the tariff becomes EXCIBALE whether nil rate.

This means nil rate is also a rate of excise duty because this implies from the definition of exempted goods which (specially) excludes nil chargeable goods from exempted goods which otherwise covers by Excisable goods.

Hence Exempted goods means goods other then excisable goods (excisable goods mentioned in tariff) which are exempted by a exemption notification and goods (excisable goods mentioned in tariff) chargeable to nil rate of duty.

EXCISABLE GOODS= GOODS SPECIFIED IN TARIFF SUBJECT TO DUTY (AND DUTY INCLUDES NIL)

EXEMPTED GOODS= EXCISABLE GOODS EXEMPTED VIDE NOTIFICATION+ EXCISABLE GOODS CHARGABLE NIL RATE OF DUTY

For further query, feel free to write sanjayinfbd@yahoo.com (M-09350048731) or visit, HNO. 2489/8,Faridabad(Haryana).

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