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There is a tax in India known as the Additional Excise Duty (AED) imposed and collected by the Centre. Basically, this is not a form of excise duty. At the same time, though the Centre collects it, the total corpus of collected tax is handed over to the states.
On the request of the states, the central government passed the Goods of Special Importance Act, 1957 which empowered the Centre to collect the AED on tobacco, textile and sugar in lieu of the states’ sales tax on them so that these regionally produced goods (which are consumed nationally) have
uniform and affordable prices across the country.
Once VAT is fully operational in the economy this responsibility will be handed over to the states (as proposed) to be integrated with their VAT with the condition that none of these commodities will be charged VAT exceeding 4 per cent.