Excise taxes are taxes required on specific goods or services like fuel, tobacco, and alcohol. Excise taxes are primarily taxes that must be paid by businesses, usually increasing prices for consumers indirectly. Excise taxes can be ad valorem (paid by percentage) or specific (cost charged by unit).
What do you mean by excise duty?
An excise or excise tax (sometimes called an excise duty) is a type of tax charged on goods produced within the country (as opposed to customs duties, charged on goods from outside the country). It is a tax on the production or sale of a good.
What are the types of excise duty?
Here are the different types of excise duties:
- Basic Excise Duty: Basic Excise Duty is levied under Section 3 of the Central Excises and Salt Act, 1944. …
- Special Excise Duty: Central Excise Duty is charged under Section 37 of the Finance Act, 1978. …
- Education Cess on Excise Duty: According to Section 93 of Finance (No.
What is difference between excise duty and custom duty?
While excise duty is levied on goods produced or manufactured within the country, custom duty applies to the goods that are sold in India but were produced in a different country. Excise duty is to be paid by the manufacturer of the goods and not by the consumer. Custom duty is to be paid by the importer of the goods.
How is excise duty calculated?
The indirect tax of excise duty is generally collected by the retail seller from the customers and paid to the government. This duty is payable on the manufacture of goods. It is payable at the time of taking delivery of the goods from the place of production or from the warehouse for the purpose of selling.
What is an excise tax example?
These include tobacco, alcohol, firearms and gambling. Excise taxes levied for this purpose are often called “sin taxes.” Similarly, governments use excise taxes to help cover costs related to the taxed item. For example, excise taxes on gasoline help pay for new highway construction.
Is customs duty a tax?
Definition: Customs Duty is a tax imposed on imports and exports of goods. … While revenue is a paramount consideration, Customs duties may also be levied to protect the domestic industry from foreign competition.