For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

What is The Difference Between Excise Duty And Sales Tax?

|

Tax payment is a financial levy charged to citizens by government in order to raise funds and run the economy of the country. Tax payment is mandatory depending on the law and the amount or charge is decided by the government based on the income of the individual. Although there are several types of tax we pay depending on which bracket we fall under the Income Tax Act.

 

There are many types of tax such as Wealth Tax, Income tax, toll tax, Custom Duty, Sales Tax and Excise Duty.

 

So, let us try to understand basic difference between excise duty and sales tax and who pays them.

Difference Between Excise Duty And Sales Tax?

What is Excise Duty?

Excise Duty is an indirect tax levied on production of goods that are manufactured and produced within the country. This type of tax is levied on manufactured goods. This is paid by the manufacturer on the finished good when it goes out of the factory. However, it is different from custom duty because custom duty is charged on goods produced outside the country.

Excise Duty is levied on all goods, except certain goods that are exempted. There are three types of Central Excise duties collected in India namely: Basic Excise Duty, Additional Duty of Excise, Special Excise Duty.

What is Sales Tax?

Sales Tax is levied on the end product which is paid by the end-user or consumer. When we buy a product there are two parts of payment: one is the price of the product and the other is tax levied on it. So, when we make a purchase we tend to pay both amount knowingly or unknowingly.

Sales tax is levied on sale or purchase within the State. Different states levy different levels of sales tax, while there is a Central Sales Tax levied on sale or purchase in the course of interstate trade.

If the GST is introduced it would streamline most of the taxes including states taxes and excise. The Bill is likely to be placed in the winter session of parliament. It is hoped that this would boost the GDP and streamline taxes in the country.

GoodReturns.in

Read more about: excise duty sales tax
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X