EXCISE DUTY Meaning and
Definition
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Excise duty refers to a form of tax imposed by the government on specific goods and services produced or manufactured within a country. This tax is generally levied at the time of production or when goods are removed from a factory or warehouse for sale or consumption. Excise duties are typically specific to certain products and are often considered indirect taxes as they are usually passed on to the end consumer by the producer or seller.
The purpose of excise duty is twofold: to generate revenue for the government and to regulate the consumption of certain goods and services. By increasing the cost of these items, excise duty aims to discourage their utilization, particularly those that may have negative social or health implications. Common examples of goods that may be subject to excise duty include alcohol, cigarettes, gasoline, luxury goods, and sugary beverages.
The rate of excise duty can vary depending on the country's fiscal policies and may be either ad valorem (a percentage of the product's value) or specific (a fixed amount per unit of the product). Governments may periodically review and adjust these rates to manage consumption patterns, ensure compliance, or address economic objectives.
It is essential to note that excise duty differs from other forms of taxation, such as value-added tax (VAT) or income tax, as it is specifically targeted towards certain goods or services rather than individuals or corporate income.
Common Misspellings for EXCISE DUTY
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Etymology of EXCISE DUTY
The word "excise" comes from the Middle English term "excesen", which means "to levy" or "to assess". It originated from the Old French word "accis", meaning "tax" or "levy". The word "duty" comes from the Old French term "deu", meaning "payment" or "obligation". Therefore, the term "excise duty" combines these two words to refer to a tax or levy imposed on certain goods or commodities.
