The Central Excise duty is collected under the authority of the Central Excise Act, 1944, at the rates specified under Central Excise Tariff Act, 1985. This duty is commonly referred as the Basic Excise Duty.
In addition to basic excise duty, a few textile items like fiber and yarn also attract Additional Excise Duty under Additional Duties of Excise (Textiles and Textile Articles) Act, 1975. The Additional Duties of Excise (Goods of Special Importance) Act, 1957 and Miscellaneous Cess Acts provide authority for collection of Additional Excise Duty and Cess respectively on several manufactured items over and above the basic excise duty. .
The excise law provides for a scheme known as Modified Value Added Tax (Modvat). Modvat seeks to limit the cascading effect of the incidence of duty on exciseable goods used as inputs for the manufacture of other exciseable goods..