ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Excise duty is charged on the production of goods and charged at the time of removal of products. GST, on the other hand, is charged on the supply of products and services. Central GST has replaced excise duty as excise is charged by the Central Government and it also collects the revenue from Central GST.

Detailed explanation-2: -In general, an excise tax is a tax is imposed on the sale of specific goods or services, or on certain uses.

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: -Differences between Excise Duty & Sales Tax Excise duty is on the production of goods whereas sales tax is levied on sale of goods. Excise duty is paid by the manufacturer while the burden of sales tax is borne by the end consumer.

Detailed explanation-5: -(i) Excise duty should be considered as a manufacturing expense and like other manufacturing expenses be considered as an element of cost for inventory valuation.