Pan
Masala Duty Raised by Hiking Production Capacity
Government
Revises the Capacity of Production and Consequent Increases the Duty on Pan
Masala and Tobacco Products Including, Gutka, Chewing
Tobacco, and Filter Khani etc
Considering the increase in the average speed of
packing machines, the Government has revised the capacity of production and
consequently increased the duty applicable to pan masala and tobacco products
including gutka, chewing tobacco, unmanufactured tobacco
and filter khaini packed in pouches with the aid of
packaging machines etc. under the compounded levy scheme. Pan masala, pan masala containing tobacco (gutkha),
chewing tobacco, unmanufactured tobacco and filter khaini
packed in pouches with the aid of packaging machines are leviable
to excise duty on the basis of the capacity of production which is determined
based on the average speed of packing machines of pouches of various retail
sale prices. The duty rate on the said goods was last revised in the Budget
2012-13.
CBEC has issued its Notifications No.3/2014-Central
Excise (NT) and No.4/2014-Central Excise (NT) both dated 24.01.2014 in order to
specify the amended deemed production of these goods in pouches of various
retail sale prices. Notifications No.1/2014-Central Excise and
No.2/2014-Central Excise, both dated 24.01.2014 specify the duty payable in
respect of these goods packed in pouches of various retail sale prices.
[CBEC
Circular No. 980 dated 24th January 2014]
Subject:
Divergent practices of assessment with respect to compounded levy scheme
applicable for smokeless tobacco products.
Representations have been received from trade and
industry that the field formations are following divergent practice of
assessment with respect to compounded levy scheme applicable for various
tobacco products. Certain field formations have also sought clarification on
the excise duty leviable under the said compounded
levy scheme.
2. Under
the compounded levy scheme, excise duty is chargeable with respect to deemed
production based on the number of packing machines in the factory of the
manufacturer. The issue raised is whether excise duty can be re-determined
based on the speed of the packing machine and actual production thereof, which
may be higher than the deemed production.
3. Presently,
the mandatory compounded levy scheme is applicable to Pan Masala, Gutkha and chewing tobacco
manufactured with the aid of packing machine & packed in pouches. The
factor relevant to the production on which excise duty is leviable
has been notified to be the number of packing machines in the factory of the
manufacturer under the Pan Masala Packing Machines (Capacity
Determination and Collection of Duty) Rules, 2008 and the Chewing Tobacco and
Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection
of Duty) Rules, 2010 read with section
3A (2) and (3) of the Central Excise Act, 1944. The monthly deemed
production per operating machine per month is prescribed based on the average speed of packing machines and average
working hours of a factory. Excise duty is chargeable at the rates notified on
the basis of Retail Sale Price (RSP) slabs on per machine basis (notification
No.42/2008-CE dated 01.07.2008 and notification No.16/2010-CE, dated 27.02.2010
refer). In order to minimize the element of subjectivity and to ensure
certainty and objectivity, the number of packing machines installed in the
factory has been notified to be the only factor relevant to the production of
the notified goods under the said rules.
5. Accordingly, it is clarified that the duty
payable under notification No.42/2008-CE dated 01.07.2008 and notification
No.16/2010-CE, dated 27.02.2010 may be determined based on deemed production
with respect to the number of operating packing machines in the factory during
the month and the Retail Sale Price printed on the pouches and not on the basis
of actual production by a unit.
6. Trade
Notice/Public Notice may be issued to the field formations and taxpayers.
7. Difficulties
faced, if any, in implementation of this Circular may be brought to the notice
of the Board.
F.No.354/120/2011-TRU
[Central Excise Notification No. 01 dated 24th January 2014]
In exercise of the powers conferred by sub-section (3) of section 3A of
the Central Excise Act, 1944(1 of 1944), the Central Government hereby makes
the following further amendments in the notification of the Government of India
in the Ministry of Finance (Department of Revenue) No. 42/2008-Central Excise,
dated the 1st July, 2008, published
in the Gazette of India, Extraordinary,
Part II, Section 3, Sub-section (i) vide number G.S.R. 492(E), dated the 1st July, 2008, namely:-
In the said notification,
(i) for Table-1 and the illustration, the following shall be substituted,
namely:-
|
“Table-1 |
|||
|
Sl. No. |
Retail sale price (per pouch) |
Rate of duty Per packing machine per month(Rs.
in Lakhs) |
|
|
Pan masala |
Pan masala containing tobacco |
||
|
(1) |
(2) |
(3) |
(4) |
|
1. |
Up to Re. 1.00 |
14.76 |
24.42 |
|
2. |
Exceeding Rs. 1.00
but not exceeding Rs. 1.50 |
22.14 |
36.64 |
|
3. |
Exceeding
Rs. 1.50 but not exceeding Rs. 2.00 |
28.04 |
46.40 |
|
4. |
Exceeding Rs. 2.00
but not exceeding Rs. 3.00 |
42.06 |
69.61 |
|
5. |
Exceeding Rs. 3.00
but not exceeding Rs. 4.00 |
54.31 |
89.88 |
|
6. |
Exceeding Rs. 4.00
but not exceeding Rs. 5.00 |
67.88 |
112.35 |
|
7. |
Exceeding Rs. 5.00
but not exceeding Rs. 6.00 |
81.46 |
134.82 |
|
8. |
Above Rs. 6.00 |
81.46 + 13.28 * (P-6), |
134.82 +
21.98 *
(P-6), |
|
|
|
Where ‘P’ above represents RSP
of the pouch for which duty rate is to be determined |
|
Illustration. -The rate of duty per packing machine per month for
a Pan masala pouch having retail sale price of Rs. 8.00 (i.e. ’P’) shall be= Rs.
81.46 + 13.28 * (8-6) lakhs
= Rs. 108.02 lakhs.”
(ii) for the Table -2, the following shall be substituted, namely:-
|
“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 |
0.2842 |
0.7665 |
|
2. |
The additional duty of excise leviable
under section 85 of the Finance Act, 2005 |
0.1421 |
0.0766 |
|
3. |
National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001 |
0.5446 |
0.1277 |
|
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”. |
[F.No 354/120/2011-TRU]
[Central Excise Notification No. 02 dated 24th
January 2014]
In exercise of the powers conferred by sub-section (3) of section 3A of
the Central Excise Act, 1944(1 of 1944), the Central Government hereby makes
the following further amendment in the notification of the Government of India
in the Ministry of Finance (Department of Revenue), No. 16/2010-Central Excise,
dated the 27th February, 2010, published in the Gazette of India,
Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 118 (E), dated the 27th
February, 2010, namely :-
In the said notification, for Table-1, and the proviso, and
illustrations 1 and 2, the following shall be substituted, namely:-
|
“Table-1 |
||||||
|
Sl. No. |
Retail sale price (per pouch) |
Rate of duty per packing machine per month (Rs. in Lakhs) |
||||
|
|
|
Chewing Tobacco (other than filter khaini) |
Unmanufactured Tobacco |
Chewing tobacco commonly known as filter khaini |
||
|
Without lime tube/lime pouches |
With lime tube/lime pouches |
Without lime tube/lime pouches |
With lime tube/lime pouches |
|||
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
|
1. |
Upto Re.1.00 |
14.07 |
13.36 |
10.03 |
9.53 |
9.67 |
|
2. |
Exceeding Rs. 1.00
but not exceeding Rs. 1.50 |
21.10 |
20.05 |
15.05 |
14.30 |
14.51 |
|
3. |
Exceeding Rs. 1.50
but not exceeding Rs. 2.00 |
25.32 |
23.92 |
18.06 |
17.06 |
18.38 |
|
4. |
Exceeding Rs.2.00 but not exceeding Rs.3.00 |
37.98 |
35.87 |
27.09 |
25.58 |
26.19 |
|
5. |
Exceeding Rs.3.00 but not exceeding Rs.4.00 |
47.27 |
44.45 |
33.71 |
31.70 |
33.17 |
|
6. |
Exceeding Rs.4.00 but not exceeding Rs.5.00 |
59.08 |
55.57 |
42.14 |
39.63 |
39.39 |
|
7. |
Exceeding Rs.5.00 but not exceeding Rs.6.00 |
70.90 |
66.68 |
50.56 |
47.55 |
44.90 |
|
8. |
Exceeding Rs.6.00 but not exceeding Rs.7.00 |
112.54 |
105.51 |
80.26 |
75.24 |
49.77 |
|
9 |
Exceeding Rs.7.00 but not exceeding Rs.8.00 |
112.54 |
105.51 |
80.26 |
75.24 |
54.03 |
|
10 |
Exceeding Rs.8.00 but not exceeding Rs.9.00 |
112.54 |
105.51 |
80.26 |
75.24 |
57.75 |
|
11 |
Exceeding Rs.9.00 but not exceeding Rs.10.00 |
112.54 |
105.51 |
80.26 |
75.24 |
60.96 |
|
12 |
Exceeding Rs. 10.00 but not exceeding Rs.15.00 |
158.69 |
150.75 |
113.17 |
107.51 |
60.96 + 6.10*(P-10) |
|
13 |
Exceeding Rs. 15.00 but not exceeding Rs.20.00 |
198.89 |
188.94 |
141.84 |
134.75 |
|
|
14 |
Exceeding Rs.20.00 but not exceeding Rs.25.00 |
233.69 |
222.01 |
166.66 |
158.33 |
|
|
15 |
Exceeding Rs. 25.00 but not exceeding Rs.30.00 |
263.60 |
250.42 |
187.99 |
178.59 |
|
|
16 |
Exceeding Rs.30.00 but not exceeding Rs.35.00 |
289.08 |
274.63 |
206.16 |
195.85 |
|
|
17 |
Exceeding Rs.35.00 but not exceeding Rs.40.00 |
310.56 |
295.03 |
221.48 |
210.40 |
|
|
18 |
Exceeding Rs. 40.00 but not exceeding Rs.45.00 |
328.42 |
312.00 |
234.21 |
222.50 |
|
|
19 |
Exceeding Rs.45.00 but not exceeding Rs.50.00 |
343.01 |
325.86 |
244.62 |
232.39 |
|
|
20 |
From Rs.50.00 onwards |
343.01+ 6.86* (P-50) |
325.86+ 6.52 * (P-50) |
244.62+ 4.89 * (P-50) |
232.39+ 4.65 * (P-50) |
|
|
Where ‘P’ above
represents RSP of the pouch for which duty rate is to be determined |
||||||
Provided that for the
purposes of entry in column number (7), against Sl.No.12, the existing entry in
column number (2) shall be read as ‘Rs. 10.01 and
above’.
Illustration
1:- The rate of duty per
packing machine per month for a chewing tobacco (other than filter khaini) pouch not containing lime tube and having retail
sale price of Rs.55.00 (i.e. ‘P’) shall be = Rs.
343.01 + 6.86*(55-50) lakhs = Rs. 377.31 lakhs.
Illustration
2:- The rate of duty per
packing machine per month for a Filter Khaini pouch having retail sale price of Rs.15.00
(i.e. ‘P’) shall be = Rs. 60.96 + 6.10*(15-10) lakhs
= Rs. 91.46
lakhs.”
[F. No. 354/120/2011-TRU]
[Central
Excise Notification No. 04 (Non Tariff) dated 24th
January 2014]
In exercise of the powers conferred by
sub-sections (2) and (3) of section 3A of the Central Excise Act, 1944 (1 of
1944), the Central Government hereby makes the following rules further to amend
the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity
Determination and Collection of Duty ) Rules, 2010, namely:-
1.
(1)
These rules may be called the Chewing Tobacco and Unmanufactured Tobacco
Packing Machines (Capacity Determination and Collection of Duty) First
Amendment Rules, 2014.
(2) They shall come into force on the date of their
publication in the Official Gazette.
2.
In
the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity
Determination and Collection of Duty) Rules, 2010, -
(i) in rule 5, for the
Table, the following shall be substituted, namely:-
|
“Table |
||||
|
Sl. No |
Retail sale price (per pouch) |
Capacity of production per packing machine per
month for chewing tobacco (including Filter Khaini),
unmanufactured tobacco and jarda scented tobacco
(number of pouches) |
||
|
|
|
Without lime tube/ lime pouch |
With lime tube/lime pouches |
Filter Khaini |
|
(1) |
(2) |
(3) |
(4) |
(5) |
|
1. |
Up to Re.1.00 |
3993600 |
3793920 |
2745600 |
|
2. |
Exceeding Re. 1.00 but not exceeding Rs. 1.50 |
3993600 |
3793920 |
2745600 |
|
3. |
Exceeding Rs. 1.50
but not exceeding Rs.
2.00 |
3594240 |
3394560 |
2608320 |
|
4. |
Exceeding Rs.2.00 but not exceeding Rs.3.00 |
3594240 |
3394560 |
2477904 |
|
5. |
Exceeding Rs.3.00 but not exceeding Rs.4.00 |
3354624 |
3154944 |
2354009 |
|
6. |
Exceeding Rs.4.00 but not exceeding Rs.5.00 |
3354624 |
3154944 |
2236308 |
|
7. |
Exceeding Rs.5.00 but not exceeding Rs.6.00 |
3354624 |
3154944 |
2124493 |
|
8. |
Exceeding Rs.6.00 but not exceeding Rs.7.00 |
3194880 |
2995200 |
2018268 |
|
9 |
Exceeding Rs.7.00 but not exceeding Rs.8.00 |
3194880 |
2995200 |
1917355 |
|
10 |
Exceeding Rs.8.00 but not exceeding Rs.9.00 |
3194880 |
2995200 |
1821487 |
|
11 |
Exceeding Rs.9.00 but not exceeding Rs.10.00 |
3194880 |
2995200 |
1730413 |
|
12 |
Exceeding Rs. 10.00 but not exceeding Rs.15.00 |
3003187 |
2853028 |
1730413 |
|
13 |
Exceeding Rs. 15.00 but not exceeding Rs.20.00 |
2822996 |
2681846 |
- |
|
14 |
Exceeding Rs.20.00 but not exceeding Rs.25.00 |
2653616 |
2520935 |
- |
|
15 |
Exceeding Rs.
25.00 but
not exceeding Rs.30.00 |
2494399 |
2369679 |
- |
|
16 |
Exceeding Rs.30.00 but not exceeding Rs.35.00 |
2344735 |
2227499 |
- |
|
17 |
Exceeding Rs.35.00 but not exceeding Rs.40.00 |
2204051 |
2093849 |
- |
|
18 |
Exceeding Rs. 40.00 but not exceeding Rs.45.00 |
2071808 |
1968218 |
- |
|
19 |
Exceeding Rs.45.00 but not exceeding Rs.50.00 |
1947500 |
1850125 |
- |
|
20 |
Above Rs.50.00 |
1947500 |
1850125 |
-” |
(ii) in rule 6, in
sub-rule 3,for the third proviso, the following shall be substituted, namely:-
“Provided further that annual capacity
of production for the period from the 24th day of January, 2014 to
the 31st day of January, 2014 shall be calculated on pro-rata basis for the
total number of days in the month of January, 2014 and the number of days
remaining in the month starting from and including the 24th day of
January, 2014.”
[F.No.
354/120/2011-TRU]
[Central
Excise Notification No. 03 (Non Tariff) dated 24th
January 2014]
In exercise of the powers
conferred by sub-sections (2) and (3) of section 3A of the Central Excise Act,
1944 (1 of 1944), the Central Government hereby makes the following rules
further to amend the Pan Masala
Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, namely :-
1. (1) These rules may be called the
Pan Masala Packing Machines (Capacity
Determination and Collection of Duty) First Amendment
Rules, 2014.
(2) They shall come into
force on the date of their publication in the Official Gazette.
2. In the Pan
Masala Packing Machines (Capacity Determination and Collection of Duty) Rules,
2008,-
(i) in rule 5, for the TABLE, the following shall be
substituted, namely:-
|
“Table |
||
|
Sl. No. |
Retail sale price (per pouch) |
Number of pouches per operating packing machine per
month |
|
1. |
Up to Re. 1.00 |
6240000 |
|
2. |
Exceeding Re. 1.00 but not exceeding Rs. 1.50 |
6240000 |
|
3. |
Exceeding
Rs. 1.50 but not exceeding Rs. 2.00 |
5928000 |
|
4. |
Exceeding Rs. 2.00
but not exceeding Rs. 3.00 |
5928000 |
|
5. |
Exceeding Rs. 3.00
but not exceeding Rs. 4.00 |
5740800 |
|
6. |
Exceeding Rs. 4.00
but not exceeding Rs. 5.00 |
5740800 |
|
7. |
Exceeding Rs. 5.00
but not exceeding Rs. 6.00 |
5740800 |
|
8. |
Above Rs. 6.00 |
5616000” |
(ii) in rule 6, in
sub-rule 3, for the second proviso, the following proviso shall be substituted
, namely:-
“Provided
further that the annual capacity of production for the period from the 24th
day of January, 2014 to the 31st day of January, 2014 shall be calculated on
pro-rata basis for the total number of days in the month of January, 2014 and
the number of days remaining in the month starting from and including the 24th
day of January, 2014.”
(iii) in FORM – 2, in
Sl.No.4, for item (iv),the following shall be substituted, namely:-
“(iv) Break-up of duty
payment for apportionment between various duties is as per details below:-
|
Sr. No. |
Duty |
Duty ratio for pan masala |
Duty paid (Rs.) |
Duty ratio for pan masala containing tobacco |
Duty paid (Rs.) |
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
|
1 |
The duty leviable under
the Central Excise Act, 1944 |
0.2842 |
|
0.7665 |
|
|
2 |
The additional duty of excise leviable
under section 85 of the Finance Act, 2005 |
0.1421 |
|
0.0766 |
|
|
3 |
National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001 |
0.5446 |
|
0.1277 |
|
|
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” |
|
[F
No.354/120/2011-TRU]