Electricity Excisable?
TWO days ago we carried an article in our ST se GST Tak column by Ravindran entitled Service Tax: Poor power needs Diwali Gift!
One of the comments of the learned author was, “However, under the Central Excise Tariff Act, 1985, “electricity” is not one of the commodities specified under any of the Chapters and obviously it is not an Excisable goods.”
We carried it with the full knowledge that the comment will invite angry reactions and it did.
The author reacts, “While acknowledging gratitude for publishing the article under the above caption, I wish to respond to the responses as under:-
According to Section 2 (d) of Central Excise Act, 1944, "Excisable goods" means goods specified in the Schedules to the Central Excise Tariff which are [It is actually ‘as being'] subject to duty of excise. Electricity, even if assumed to be covered under 2716 00 00, is not having any duty (not even Nil rate). Hence electricity cannot be considered either excisable or exempted goods.”
Once upon a time, electricity was excisable and dutiable. There was actually a duty of 2 paise per unit of electrical energy. Later it was exempted and in the 1986 Tariff, electricity found no place, but it reappeared in the 2005 8 digit tariff; it again found a place under heading 2716 00 00 with no rate of duty.
So Mr Ravindran is right in assuming that electricity is not excisable goods.
Electricity figures in the tariff but it is not subject t to any duty of excise. If electricity is excisable, so are horses and donkeys.
See our story - Are horses, bulls, dolphins and asses excisable goods?
Tomorrow, we will bring you a CESTAT order related to this issue.