Medicinal and Toilet preparations New Rates — 17 Mar 2003

What This Document Says

Gazette Reference: No.MTP/I12002/UX-7, dated 14th March, 2003

Type: Fee/Duty Revision — Excise Duty on Medicinal and Toilet Preparations

Authority: Bombay Prohibition Act, 1949 (implementing Government of India, Ministry of Finance notification No.1/2003-M&TP dated 1.3.2003, as per Finance Bill 2000)

Summary: This circular revises the rates of excise duty leviable on medicinal and toilet preparations containing alcohol or narcotic drugs, effective from 1st March 2003. Crucially, it shifts the duty calculation basis for Ayurvedic/Homeopathic preparations from per-litre of pure alcohol content to ad valorem (percentage of value), introduces a self-assessment mechanism for manufacturers, and mandates maintenance of current accounts with minimum credit balances for duty payment.

KEY CHANGES:

1. REVISED EXCISE DUTY RATES (Effective 1.3.2003):

Sr. No.	Description of Dutiable Goods	Rate of Duty
1	Allopathic Medicinal Preparations
1(a)	Medicinal preparations containing alcohol which are not capable of being consumed as ordinary alcoholic beverages
	(i) Patent or proprietary medicines	16% ad valorem
	(ii) Others	16% ad valorem
1(b)	Medicinal preparations capable of being consumed as ordinary alcoholic beverages
	(i) Medicines not containing known active ingredients in therapeutic quantities	50% ad valorem
	(ii) Others	16% ad valorem
1(c)	Medicinal preparations not containing alcohol but containing narcotic drugs	16% ad valorem
2	Unani or Ayurvedic Medicines containing alcohol or narcotic drugs	16% ad valorem
3	Toilet Preparations containing alcohol or narcotic drugs	16% ad valorem (on 60% of retail sale price minus 40% abatement)
5	Medicinal preparations containing self-generated alcohol not capable of being consumed as alcoholic beverages	Nil
6	All medicines containing alcohol prepared by distillation or to which alcohol has been added	16% ad valorem
7	Homeopathic preparations containing alcohol	4% ad valorem

2. MAJOR STRUCTURAL CHANGES:

Duty Calculation Basis Shift:

Previous System: Ayurvedic/Homeopathic preparations taxed per litre of pure alcohol content
New System: All preparations brought under ad valorem basis (percentage of assessable value)
For toilet preparations: Duty calculated on retail sale price mentioned on label minus 40% abatement (i.e., 60% of retail price is assessable value)

3. SELF-ASSESSMENT SYSTEM (Immediate Effect):

Current Account Mechanism:

Every manufacturer must open a current account in the name of the Excise Department

Minimum credit balance = Average excise duty paid in last six months OR ₹1,00,000 (whichever is lower)

Goods can be removed only after depositing duty from credit balance above the minimum maintained

Manufacturer Obligations:

Get assessable price and excise duty payable pre-approved by excise authority before commencing self-assessment
Nominate an authorized officer (name notified to Excise Department) responsible for duty compliance
Factory manager remains ultimately liable for any duty shortfalls detected in audit

Record-Keeping Requirements:

Authorized officer must maintain daily records (electronic or manual format)
If electronic, print copies must be pasted in approved registers
Records must reflect: finished goods stock, production, goods removed, excise duty paid
All registers must be signed by authorized officer daily

Returns and Compliance:

Submit daily/monthly returns as per Medicinal & Toilet Preparation Rules and as prescribed by Superintendent State Excise
Frequency: As directed, but minimum twice every month

4. INSPECTION AND OVERSIGHT:

Excise Inspector Duties:

Each inspection recorded in visiting book maintained by licensee
Inspection must verify: raw materials, stock, consumption, production, duty paid
Inspector must note satisfaction that duty correctly calculated and paid

Superintendent State Excise Duties:

Visit every unit at least once per year
Verify appropriate records maintenance and timely duty payment
Issue copies of circular to all licensees in district
Ensure acknowledgment of circular receipt from all Superintendents

5. TRANSITIONAL PROVISIONS:

Differential Duty Recovery:

Where old rates applied during 1-14 March 2003, differential duty may be recovered from the manufacturer's current account

Immediate Applicability:

Circular effective immediately
All concerned licensees must be notified by Superintendents
All Superintendents must acknowledge receipt of circular

EFFECTIVE DATE:

New excise duty rates: 1st March 2003
Self-assessment and current account mechanism: Immediate effect from 14th March 2003

Authority Reference: Commissioner of State Excise, Maharashtra State, Mumbai (circular No.MTP/I12002/UX-7)

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मराठीत सारांश

# सोप्या मराठीत समजावून सांगा

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## **थोडक्यात:**
14 मार्च 2003 ला महाराष्ट्र Government ने दारूंचा dose असलेल्या औषधांवर Excise Duty बदलली. आता duty हिशाब एकसारखाच (16% ad valorem) लागू झाला. Manufacturers ला एक current account खोलून minimum balance ठेवून self-assessment करायचं आहे.

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## **मुख्य बदल काय झाले?**

### **1️⃣ नवीन Duty दर (1 मार्च 2003 पासून):**

**साधारण औषधे (Allopathic)** — 16% ad valorem
- पण जर पीण्यायोग्य असतील तर 50% (अगर थेरेपिउटिक खरेदार असतील तर 16%)

**आयुर्वेद / उनानी औषधे** — 16% ad valorem
- आधी लिटरच्या हिशाबाने होती, आता % हिशाबाने

**होमिओपैथी औषधे** — मात्र 4% ad valorem (सर्वात कमी!)

**टॉयलेट प्रिपरेशन्स** — 16% (पण retail price च्या 60% वरच)

**Homeopathic + Ayurvedic** — 16% ad valorem (आधी अलग system होते)

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### **2️⃣ Self-Assessment System (नवीन सिस्टम):**

**Manufacturers ला काय करायचं:**

✅ **Current Account खोलून ठेवा** Excise Department च्या नावावर
- Minimum balance = **गेल्या 6 महीन्यांचा सरासरी duty (किंवा ₹1,00,000 — जो कमी हो)**

✅ **Duty अग्रिम भरा** — goods निकालण्यापूर्वी account मधून

✅ **Daily Records ठेवा** — Production, Stock, Goods Removed, Duty Paid
- Handwritten किंवा Electronic (प्रिंट copy कॉपी करून paste करा)

✅ **Authorized Officer नियुक्त करा** — जो records maintain करेल आणि daily sign करेल

✅ **Returns दाखल करा** — कमीत कमी **महिन्यातून 2 वेळा** (जसे Superintendent सांगेल)

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### **3️⃣ Excise Inspector आणि Superintendent ची जबाबदारी:**

🔍 **Inspector** — हर visit रेकॉर्ड करेल, duty सही आहे की नाही तपासेल

🔍 **Superintendent** — **साल मध्ये कमीत कमी एकदा** प्रत्येक फॅक्टरीला भेट देऊन तपासेल

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### **4️⃣ खास गोष्टी:**

| गोष्ट | पूर्वी | आता |
|-----|-----|------|
| **Ayurvedic duty हिशाब** | Per litre (pure alcohol) | % व्यवहार (16% ad valorem) |
| **Homeopathic duty** | — | 4% ad valorem (सर्वात कमी) |
| **Toilet preps duty** | — | 16% (retail price च्या 60% वर) |

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### **5️⃣ काय मतलब "Ad Valorem"?**

"Ad valorem" = **product च्या किमतीचा %" हिशाब**

उदाहरण:
- एक Ayurvedic दवा ₹100 चे आहे
- 16% ad valorem duty = ₹100 × 16% = **₹16 duty**

Toilet prep (MRP ₹100, minus 40% abatement):
- Assessable value = ₹100 × 60% = ₹60
- 16% duty = ₹60 × 16% = **₹9.60 duty**

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### **6️⃣ Manufacturer ला काय नुकसान?**

❌ **Current Account मध्ये minimum पैसे ठेवायचे पडेल**
- गेल्या 6 महीन्यांचा सरासरी duty किंवा ₹1 लाख (जो कमी हो)

❌ **Daily Records + Authorized Officer ठेवायचा obligation**

❌ **Twice monthly returns दाखल करायचे**

❌ **Inspection होणार हर महिने + annual Superintendent visit**

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### **📅 कधून लागू?**

✅ Duty rates: **1 मार्च 2003**
✅ Self-assessment + Current account: **14 मार्च 2003** (तत्काळ)

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**सरळ सांगायचं तर:** Homeopathy सर्वात सस्त (4%), बाकी सब 16% ad valorem, पण manufacturer ला कागदपत्रे आणि बँक account खेळ सुरू झालाय! 📋💰

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