In India, the three types of Central Excise Taxes being collected include the Basic Excise Duty, Additional Duty of Excise, and Special Excise Duty.The Basic Excise Duty is charged under the Section 3 of the Central Excises and Salt Act, 1944. According to this all excisable goods other than salt produced or manufactured in India, has to pay the rates given in the schedule to the Central Excise Tariff Act, 1985.As per the Section 3 of the Additional duties of Excise Act, 1957 it is authorized that only the goods described in the Schedule to this Act are liable for Excise Tax payments. Generally these are imposed under different categories like medicinal and toilet preparations, sugar and other industries development.The Special Excise Duty following the Section 37 of the Finance Act, 1978 was imposed on all excisable goods that are also subjected to Basic excise Duty under the Central Excises and Salt Act, 1944. However, the Finance Act provisions regarding the said fiscal year specify the levy and collection of the Special Excise Duty. The appropriate transfer pricing strategy balances opportunity and risk management, weighing effective tax-rate optimizations against fiscal-authority challenges and the costs of compliance.Tax authorities in India have stepped up their focus on transfer pricing. The Income-tax Act, 1961 now has specific regulations relating to transfer pricing.finance and tax professionals with extensive experience in transfer pricing and international tax issues. Our proprietary software for transfer pricing has an exhaustive database of comparable companies across a wide spectrum of industries. This enables us to undertake cross border transfer pricing studies from within India, which is then reviewed by offices abroad, resulting in substantial cost savings to the client.
Transfer pricing compliance may pose a significant burden for SMEs and keeping this in mind, threshold limits have been provided for TP audits and to maintain detailed TP documentation. The tax payer is not relieved of the responsibility of demonstrating that his/her international transactions are at arm’s length. To simplify the requirements for SMEs and reduce the workload of revenue officers, a more liberal threshold limit and condition needs to be introduced.
In business, low profits in the short-run are not unusual as they may be part of the business strategy itself. Recognition of business strategies as a comparability factor in Indian TP regulations will lead to an acceptance that a tax payer can incur losses under arm’s length conditions

The rates of the Excise Tax vary depending on the nature of commodity. Sometimes, even for the similar commodity the tax rates are different depending on circumstances. Factors like end-use and taxability of inputs are responsible for this. The Excise Tax rates are notified in the Central Excise Tariff Act but can be revised accordingly by the annual Finance Acts. However, the former Acts should be considered to determine the applicable excise duty rate for any commodity. According to the Central Excise Tax provisions, such excise duty can be imposed on any goods either produced or manufactured, although the payment can be done during the time of removing the goods.