Business Studies, asked by Atul4490, 11 months ago

Distinguish between ‘Sales Tax’ and ‘Excise Duty’. [CBSE Delhi 2015]

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Answered by Anonymous
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Answer:

An excise duty (tax) is levied on a specific good or service and is typically on the producer, who bakes it into the price charged to the distributor. At the consumer end, it's included in the sale price. An excise tax law identifies what specific thing is being taxed.

Excise taxes are much more focused than a sales tax and can be used as a means for specific fund-raising (such as the fuel tax that's supposed to be used just for road projects) or deterrence (such as a tobacco tax to make cigarettes more expensive and to fund anti-smoking campaigns).

A sales tax is levied on broad categories of goods or services and is typically not included in the price of the item. It's collected from the consumer by the retailer in addition to the displayed price of the item. A sales tax law identifies what specific things are not taxed, leaving anything not mentioned as being subject to the tax.

A sales tax on the other hand goes into the general revenue fund to be used for any type of government spending.

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