ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A per unit tax, or specific tax, is a tax that is defined as a fixed amount for each unit of a good or service sold, such as cents per kilogram. It is thus proportional to the particular quantity of a product sold, regardless of its price. Excise taxes, for instance, fall into this tax category.

Detailed explanation-2: -A unit tax is a set amount of tax per unit sold, such as a 10p tax on packets of cigarettes. In contrast, an ad valorem tax is a percentage tax based on the value added by the producer.

Detailed explanation-3: -Today, excise duty applies only on petroleum and liquor. Excise duty was levied on manufactured goods and levied at the time of removal of goods, while GST is levied on the supply of goods and services.

Detailed explanation-4: -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. This tax is now known as the Central Value Added Tax (CENVAT).

Detailed explanation-5: -ad valorem tax, any tax imposed on the basis of the monetary value of the taxed item. Literally the term means “according to value.” Traditionally, most customs and excises had “specific” rates; the tax base was defined in terms of physical units such as gallons, pounds, or individual items.