USA HISTORY

Detailed explanation-1: -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-2: -It is imposed on all excisable goods except salt. It is a tax levied on all goods that are scheduled under Section 3 of the ‘Additional Duties of Excise Act’ of 1957. This tax collected is shared between the state and central government and is levied instead of sales tax.

Detailed explanation-3: -Excise duty applies to specific goods and services while sales tax is charged for a much broader range of things. Sales tax is typically charged as a percentage of the cost, while excise duty can be charged as a percentage of the cost or on a per-unit basis.

Detailed explanation-4: -Excise duty is an indirect tax which has been subsumed by the Goods and Services Tax or GST. However, there are certain items on which excise duty is still charged. For example, alcohol, tobacco, and fuel.

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.