How GST is better as compared to Excise Duty 

What is Excise Duty 

Excise duty is a tax levied on the products manufactured within a country. Retailers or intermediaries collect this indirect tax from customers and pay it to the Central Government. 

This amount is payable when the manufacturers remove goods from their production area or warehouse and transfer it for selling. Here, the actual sale of goods or the amount is not considered since tax is applicable on the manufacture of these goods. The Central Board of Excise and Customs (CBEC) administers the whole tax collection process. 

What is GST in India 

GST is known as the Goods and Services Tax. It is one indirect tax for the whole nation, which will make India one unified common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.  

Here are some key points which make GST a better tax than Excise Duty. 

Point of difference 

Goods and Services Tax 

Excise Duty 

Tax Base 

It is a destination-based tax charged on every stage, from manufacturing till the sale of goods.  

Excise Duty was levied only on manufacture of goods. 

Tax Rates 

It has various slabs like 0%, 5%, 12%, 18% and 28% so that essential supplies can be made tax-exempt, besides collecting higher tax on luxuries. 

It varies based on different types of excise duties charged on different products. 

Invoice Matching 

Input Tax Credit can be availed on the basis of invoice number matching. It helped to maintain control. 

The taxpayer can claim Input Tax Credit based on self-assessed returns. 

Input Tax Credit 

The IGST (Integrated Goods and Services Tax) Credit can be adjusted from SGST (State Goods and Services Tax) and CGST (centre Goods and Services Tax). 

The adjustment under excise duty was not available. 


Annual Return is to be filed before September 30. 

Annual Return is to be filed before April 30. 


GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and 2 ease of doing business. In other words, GST would make doing business in the country tax neutral, irrespective of the choice of place of doing business,of%20place%20of%20doing%20business

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