Excise on production capacity introduced

NEW DELHI, July 25: In an attempt to check evasion of excise duty, the Government has notified that for certain goods excise duties will be collected on the basis of production capacity. These goods are ingots or billets of non-alloy steel and re-rolled products of non-alloy steel. The scheme will come into force from August 1, 1997.

In his Budget speech, Finance Minister P. Chidambaram had stated that there was substantial evasion of excise duty in certain sectors like induction furnaces and steel re-rolling mills. Since these mills did not report their production accurately, Chidambaram proposed that they be charged an excise duty based on their production capacities.

The notification issued today also gives the rules for determining the annual production capacity for these units. By way of illustration, an induction furnace of 3 tonne capacity will have to pay Rs 5 lakh per month as excise duty while a re-rolling mill of 10,000 tonnes will have to pay Rs 2.5 lakh per month.