Dear All,
I want to know whether education Cess and higher Education Cess of Excise Duty is calculated on Basic Excise duty Plus R & D Cess or calculated only on basic Excise Duty .
Kindly Answer the Same with related provision.
Regards,
Rinku agarwalla
Guwahati (Assam)
Am citing the text from F.A 2004 & F.A 2007 & R&D Cess Act
[F.A 2007]
S.128 The Secondary and Higher Education Cess levied under section 126, in the case of
goods specified in the First Schedule to the Central Excise Tariff Act, 1985, being goods manufactured or produced, shall be a duty of excise (in this section referred to as the Secondary and Higher Education Cess on excisable goods), at the rate of one per cent., calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess chargeable under section 93 of the Finance (No. 2) Act, 2004 and Secondary and Higher Education Cess on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 or under any other law for the time being in force
[F.A 2004]
S.93. Education Cess on excisable goods.–(1) The Education Cess levied under section 91, in the case of goods specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured or produced, shall be a duty of excise (in this section referred to as the Education Cess on excisable goods), at the rate of two per cent., calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 (1 of 1944) or under any other law for the time being in force.
Whereas S. 91 & 126 of F.A 2004 & 2007 ,respectively read as,
There shall be levied and collected, in accordance with the provisions of this Chapter as surcharge for purposes of the Union, a cess to be called the Education Cess, to fulfil the commitment of the Government to provide and finance universalised quality basic education
126. (1) Without prejudice to the provisions of sub-section (12) of section 2, there shall be levied and collected, in accordance with the provisions of this Chapter as surcharge for purposes of the Union, a cess to be called the Secondary and Higher Education Cess, to fulfil the commitment of the Government to provide and finance secondary and higher education
But S. 3 of R&D cess Act read as
There shall be levied and collected, for the purposes of this Act, a cess at such rate not exceeding five per cent, on all payments made towards the import oftechnology, as the Central Government may, from time to time, specify, bynotification, in'the Official Gazette
Unlike as in case of S.H.E.C & E.C, R&D cess Act does not provides that R&D cess be a duty of excise.
Since E.C & S.H.E.C are on aggregate of all duties of EXCISE ONLY and R&D cess is not an excise duty, there is no need to pay E.C & S.H.E.C on R&D cess levied under R&D cess Act.
[Note that section I quoted have changed,like 126 & 128 is136 & 138, this is because I quoted from orignal F.A 2004 & 2007. Lateron these provisions were amended to exclude cascading effect of EC and SHEC
since by definition EC is also excise duty and SHEC is also to be charged on EC so SHEC will be on EC also, this was removed by amendment]
S.93 is amended one, you can see its drafting, it has removed cascading effect]
Had R&D cess Act also been drafted on similar terms i.e treating R&D cess as duties of act then we would have to charge EC & SHEC inclusive of R&D cess
CAclubindia
