The Ministry of Finance Department of Revenue has committed a huge blunder by issuing a gazette notification fixing Friday September 16, 2016 as the date to enforce the provisions of all the Sections except Section 12¹ of the Constitution (One hundred and First Amendment) Act, 2016.
With the publication of this gazette notification on September 16, the Central Excise Act of 1944 and the associated rules are now inconsistent with the provisions of the Constitution. Under the new regime, following the September 16 gazatte notification, the Centre has lost the authority to levy or collect duties of excise on goods manufactured or produced in India other than Petroleum and tobacco products.
Those in knowledgeable circles are describing the gazette notification in question as a huge lapse. A senior Indian Revenue Service officer told Newsroom24x7 that it is for the first time since Independence that the Centre’s powers to levy and collect Excise duty have been curbed to this extent. He said that responsibility should be fixed and those behind the publication of the gazette notification and its contents should be held accountable. We are a Union of States with a strong Centre. The lapse committed by the Finance Ministry will have a huge adverse impact on the Sovereign tax collection function of the Centre, he went on to observe.
Inquiries have revealed that there is no ambiguity. It is an open and shut case that the Centre’s powers to levy or collect duties of Excise stand restricted to only Petroleum and tobacco products from September 16 onwards as under the powers conferred by sub-section (2) of section 1 of the Constitution (One hundred and First Amendment) Act, 2016, the Central Government has appointed “the 16th day of September, 2016” as the date for enforcing the provisions of Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 13, 14, 15, 16, 17, 18, 19 and 20 of this Act.
The Seventh Schedule of the Constitution stands amended under Section 17 of the Constitution (One hundred and First Amendment) Act, 2016. The amendment has substituted entry 84 in List I of Union List with duties of excise on the following goods manufactured or produced in India, namely:—
(a) petroleum crude;
(b) high speed diesel;
(c) motor spirit (commonly known as petrol);
(d) natural gas;
(e) aviation turbine fuel; and
(f) tobacco and tobacco products.”
As per the current status vis-a-vis duties of Excise, the Centre has forfeited its authority to levy and collect exice duties on all goods produced in the country, except petroleum and tobacco products, as the gazette notification published by Department of Revenue under Union Finance Ministry makes it mandatory to enforce Section 17 of the Constitution (One hundred and First Amendment) Act, 2016, from September 16 onwards. The date for enforcing this section should have been the same as the introduction of GST on April 1, 2017. In the interim, Section 19 of Constitution (One hundred and First Amendment) Act was already there to dictate the Transitional Provisions.
¹ Section 12 was notified earlier