INTERVIEW QUESTIONS TAX EXCISE DUTY TAX / CENVAT DETAILS

Question: What is the Purpose of Excise Duty?

Answer: There is a necessity of taxes in any country but it is important to know what the Government does with that money. Taxes are levied to ensure the smooth running of the public services in India. Excise duty is a part of it.

It makes sure that the manufacturing sector is involving themselves in the taxation to cover all aspects. Taxes can also be a tool to control the sale of a good, especially narcotic substances and alcohol. The increase in tax amount of such products may have eventually lead to reduction of purchase due to ill affordability.

Taxes in general, help Governments in infrastructure projects such as building roads, railway networks that are used by the public. It also helps to ensure that the defense forces i.e. navy, airforce and army are being maintained and the required arms are being funded, so that taxpayer or not, a citizen of India feels safe and secure at home. Other maintenances such as public parks, water treatment and cleanliness in public places are funded by such taxes. A lot of free public healthcare is funded through these taxes. Any Government or public building, organization, area or service is indeed funded by such taxes.

Also, under the Indian law system excise tax, unless exempted under the corresponding acts. If an individual or an organization is caught evading excise tax, the penance could be a fine of 20-50% of duty evaded. It also spoils the organization and the involved individual’s image. Hence, the importance of excise duty.

There is a necessity of taxes in any country but it is important to know what the Government does with that money. Taxes are levied to ensure the smooth running of the public services in India. Excise duty is a part of it.

It makes sure that the manufacturing sector is involving themselves in the taxation to cover all aspects. Taxes can also be a tool to control the sale of a good, especially narcotic substances and alcohol. The increase in tax amount of such products may have eventually lead to reduction of purchase due to ill affordability.

Taxes in general, help Governments in infrastructure projects such as building roads, railway networks that are used by the public. It also helps to ensure that the defense forces i.e. navy, airforce and army are being maintained and the required arms are being funded, so that taxpayer or not, a citizen of India feels safe and secure at home. Other maintenances such as public parks, water treatment and cleanliness in public places are funded by such taxes. A lot of free public healthcare is funded through these taxes. Any Government or public building, organization, area or service is indeed funded by such taxes.

Also, under the Indian law system excise tax, unless exempted under the corresponding acts. If an individual or an organization is caught evading excise tax, the penance could be a fine of 20-50% of duty evaded. It also spoils the organization and the involved individual’s image. Hence, the importance of excise duty. Source: CoolInterview.com

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