Excise Duties in India:1894-1994

The history of modern excise system in India can be traced back to the closing years of the last century when a duty at the rate of 5 per cent ad valorem was imposed in 1894 on cotton yarn of more than twenty counts. This article reviews the evolution of excise taxation in India over the last one hundred years (1894-1994). Post-Independence developments in the excise system form the focus of the study and cover the following aspects: constitutional provisions, growth of excise revenue, extension of commodity coverage, pattern of excise tariff, scheme of concessions and exemptions, and the introduction of MODVAT. The study relies extensively on Central Government budget papers, and reports of commissions/committees/working groups set up by the Government from time to time to examine the Indian tax structure, particularly the excise system.