Which Is An Example Of An Excise Tax? (Solution found)

Excise taxes are most often levied upon cigarettes, alcohol, gasoline and gambling. These are often considered superfluous or unnecessary goods and services. To raise taxes on them is to raise their price and to reduce the amount they are used. In this context, excise taxes are sometimes known as “sin taxes.”

Which of these is an example of an excise tax?

  • Typical examples of excise duties are taxes on gasoline and other fuels, and taxes on tobacco and alcohol (sometimes referred to as sin tax).

What’s an example of an excise tax?

Excise taxes are internal taxes that are levied on the sale of specific goods and services, such as alcohol, fuel and tobacco. For example, the excise tax on a vehicle is a percentage of the total cost while the excise tax on a tobacco and gasoline is a fixed amount.

What exactly is excise tax?

Excise duty is a form of tax imposed on goods for their production, licensing and sale. 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.

What are three types of excise taxes?


  • Specific Tax – refers to the excise tax imposed which is based on weight or volume capacity or any other physical unit of measurement.
  • Ad Valorem Tax – refers to the excise tax which is based on selling price or other specified value of the goods/articles.
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What is an excise tax give two examples of excise taxes?

Excise taxes are imposed on: fuel-inefficient vehicles including station wagons, vans and sport utility vehicles. air conditioners designed for use in automobiles, station wagons, vans or trucks and. gasoline, diesel fuel, aviation gasoline and aviation fuel.

Which tax is an excise tax quizlet?

An excise tax is a tax on sales of a good or service. The excise tax drives a wedge between price payed by consumers and that received by producers leading to a fall in the quantity transacted.

What is excise income tax?

Excise duty is a form of indirect tax that is levied by the Central Government of India for the production, sale, or license of certain goods. Excise duty charges are also collected by state governments for alcohol and narcotics. Note: Excise duty has been replaced by the Goods and Services Tax(GST) w.e.f. 1 July 2017.

Is VAT an excise tax?

An excise, or excise tax, is any duty on manufactured goods that is levied at the moment of manufacture rather than at sale. Excises are typically imposed in addition to an indirect tax such as a sales tax or value-added tax (VAT).

Why are there Excise taxes?

Excise duties usually have one or two purposes: to raise revenue and to discourage particular behavior or purchase of particular items. Taxes such as those on sales of fuel, alcohol and tobacco are often “justified” on both grounds.

What is an example of a sales tax?

Sales tax is an additional amount of money you pay based on a percentage of the selling price of goods and services that are purchased. For example, if you purchase a new television for $400 and live in an area where the sales tax is 7%, you would pay $28 in sales tax. Your total bill would be $428.

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What is VAT example?

VAT = OUTPUT TAX – INPUT TAX Let us take an example to understand the calculation of VAT properly. Assume that Raju is the owner of a hotel. He bought raw materials worth ₹ 1, 00,000 and an input tax of 10% was imposed on raw materials.

What is a Canadian excise tax?

When goods are made in Canada, excise tax is payable when the goods are delivered to the buyer. When they are imported, excise tax is payable by the importer, at the time the goods were imported. For more information, go to Excise taxes and other levies technical information or contact us at 1-866-330-3304.

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