Exemption to Supari and Concessional rate to hand-rolled cheroots
CENTRAL Government has provided excise duty exemption to all goods falling under Chapter 2106 90 30 (‘ Betel nut product known as "Supari" ) of the Central Excise Tariff Act, 1985. S. No. 27 of Notification No. is amended for this purpose. S. No. 27A of the said notification is omitted.
Further, hand-rolled cheroots falling under Chapter 2402 10 10 of Central Excise Tariff Act, 1985, with per cheroot retail sale price equivalent not exceeding Rs. 3 shall have an effective rate of excise duty of 10% . In this connection, S. No. 32B is inserted in Notification No. after S. No. 32A thereof.
For this purpose, hand-rolled cheroots means “a tobacco product manufactured by manually rolling tobacco leaves wrapped in an outer covering of tobacco leaf without the aid of power or machine, with both ends cut flat.”
And the Retail Sale Price shall be defined as per ‘Explanation No. 1 to S. No. 18A' of the said notification.
As per this definition, “Retail sale price” means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and the price is sole consideration for such sale.
Now what if the hand-rolled cheroots are loosely tied up with a thread or a rope in bundles of ten or 25 or whatever instead of clearing them in packaged form without any affixation of RSP. This is a cottage industry dominated by semi literates or illiterates whose only job is to roll tobacco leaves and sell them for a price to traders and wholesales/retailers.
How will the government go about with its job of collecting excise duty from such people? Or if the hand-rolled cheroots do not have an RSP at the time of clearance from the factory premises but are still sold with some RSP how is that going to be tackled? Or will they apply tariff rate of 16% if no RSP is affixed? These are some of the questions that the field formations will come across in the near future.
Notification No. , Dated: April 29, 2010