Significance of Exemption Notifications
Although rate of duty may be mentioned in CETA but they may be made exempt by the Government
This is done by issuing exemption notification by Central Government.
This notification may either make Goods
- Fully exempt (Duty is not charged)
- Partially exempt (Duty charged at lower rate)
Conditions subject to which exemption is available is also specified in notification
Exam Questions
Question 8
Distinguish between tariff rate of excise duty and effective rate of excise duty.
Tariff rate of duty is the rate which is given in Central Excise Tariff. However, Government
can give partial or complete exemption from payment of excise duty. Thus, the rate at which
excise duty is actually payable is termed as 'effective rate of excise duty'. For example, if rate
of excise duty given in Central Excise Tariff is 12.5%, the same would be termed as 'tariff
rate'. However, if by way of an exemption notification, excise duty payable is reduced to 6%,
the effective rate of excise duty would be 6%.
