Difference Wiki

Excise Duty vs. Custom Duty: What's the Difference?

Edited by Sara Rehman || By Sumera Saeed || Published on December 13, 2023
Excise duty is a tax levied on the manufacture of goods within a country, while custom duty is a tax imposed on imports and exports of goods.

Key Differences

Excise duty is a form of internal tax applied to goods manufactured within a country. Custom duty, in contrast, is a tax levied on goods crossing national borders, either as imports or exports.
Sumera Saeed
Dec 13, 2023
The primary purpose of excise duty is to generate revenue on domestic production, often applied to items like alcohol, tobacco, and fuel. While, custom duty aims to regulate international trade, protect domestic industries, and generate revenue from foreign goods.
Sumera Saeed
Dec 13, 2023
Excise duty rates are usually set by the domestic government and can vary based on the product category. Whereas, custom duty rates may vary depending on international trade agreements and the nature of the goods being imported or exported.
Sara Rehman
Dec 13, 2023
Administration of excise duty is typically handled by national or local tax authorities. However, custom duties are enforced at points of entry and exit, such as ports and border crossings, by customs authorities.
Harlon Moss
Dec 13, 2023
Excise duties can affect the price of goods within a country, potentially impacting local markets and consumer choices. Custom duties can influence international trade patterns and the availability of foreign products in a domestic market.
Sumera Saeed
Dec 13, 2023
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Comparison Chart

Tax Application

Levied on domestic manufacture of goods.
Imposed on imports and exports of goods.
Sumera Saeed
Dec 13, 2023

Purpose

Generates revenue from domestic production.
Regulates international trade, protects domestic industry.
Sumera Saeed
Dec 13, 2023

Rate Determination

Set by domestic government based on product type.
Influenced by international agreements, product nature.
Sumera Saeed
Dec 13, 2023

Administration

Managed by national/local tax authorities.
Enforced at borders by customs authorities.
Janet White
Dec 13, 2023

Market Impact

Affects pricing and consumption of local goods.
Influences trade patterns and availability of foreign goods.
Aimie Carlson
Dec 13, 2023
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Excise Duty and Custom Duty Definitions

Excise Duty

A tax on the production or sale of specific goods within a country.
The government increased the excise duty on tobacco products.
Sumera Saeed
Nov 26, 2023

Custom Duty

A border tax applied based on international agreements and product nature.
Custom duty on certain imports was reduced as part of a trade agreement.
Sumera Saeed
Nov 26, 2023

Excise Duty

A domestic tax applied to goods like alcohol, tobacco, and fuel.
Excise duty on alcohol contributes significantly to the state's revenue.
Sumera Saeed
Nov 26, 2023

Custom Duty

A charge on foreign goods to generate revenue and control market access.
The government uses custom duty to control the influx of foreign agricultural products.
Sumera Saeed
Nov 26, 2023

Excise Duty

An internal tax that affects the price of specific goods in the local market.
The excise duty on electronic goods was reduced in the latest budget.
Janet White
Nov 26, 2023

Custom Duty

A levy used to regulate international trade and protect domestic industries.
Custom duty is applied to balance trade deficits with other countries.
Sara Rehman
Nov 26, 2023

Excise Duty

A government charge on goods produced and consumed within a country.
Excise duty is often included in the retail price of gasoline.
Sumera Saeed
Nov 26, 2023

Custom Duty

A tax imposed on goods imported or exported across national borders.
The custom duty on imported electronics was increased to encourage local production.
Sumera Saeed
Nov 26, 2023

Excise Duty

A levy on the manufacture, sale, or use of certain goods in a country.
The new excise duty on luxury cars was introduced last month.
Sumera Saeed
Nov 26, 2023

Custom Duty

A government-imposed tax at ports of entry for imported and exported goods.
The custom duty on exported raw materials is lower to promote international trade.
Harlon Moss
Nov 26, 2023

FAQs

How does excise duty impact local businesses?

Excise duty can increase the cost of production for local businesses, affecting their pricing and competitiveness.
Sumera Saeed
Dec 13, 2023

What goods are typically subject to custom duty?

Goods like electronics, automobiles, and certain agricultural products are often subject to custom duty.
Janet White
Dec 13, 2023

How is custom duty calculated?

Custom duty is calculated based on the value, weight, or volume of the imported or exported goods, and the duty rate.
Sumera Saeed
Dec 13, 2023

What is the purpose of excise duty?

The purpose of excise duty is to generate revenue from domestic production and regulate consumption of certain goods.
Janet White
Dec 13, 2023

How do trade agreements affect custom duty?

Trade agreements can lower or eliminate custom duties between signatory countries to encourage trade.
Harlon Moss
Dec 13, 2023

Is custom duty applicable on personal belongings during travel?

Custom duty may apply to personal belongings exceeding certain value limits during international travel.
Aimie Carlson
Dec 13, 2023

What's the difference in administration of excise and custom duties?

Excise duty is administered by national/local tax authorities, while custom duties are managed by customs authorities at borders.
Harlon Moss
Dec 13, 2023

What is excise duty?

Excise duty is a tax on the production or sale of specific goods within a country.
Sumera Saeed
Dec 13, 2023

Can excise duty rates vary within a country?

Yes, excise duty rates can vary based on regional policies and the type of product.
Aimie Carlson
Dec 13, 2023

What is custom duty?

Custom duty is a tax on goods imported or exported across national borders.
Sara Rehman
Dec 13, 2023

Are exports typically subject to custom duty?

Exports can be subject to custom duty, but rates and policies vary depending on the country and trade agreements.
Janet White
Dec 13, 2023

How does excise duty affect consumers?

Excise duty can lead to higher prices for certain goods, impacting consumer choices and spending.
Janet White
Dec 13, 2023

Can excise duty be refunded?

In some cases, excise duty can be refunded, especially for exported goods or specific business scenarios.
Sumera Saeed
Dec 13, 2023

Are there exemptions from custom duty?

Yes, certain goods and specific scenarios, like diplomatic imports, may be exempt from custom duty.
Janet White
Dec 13, 2023

Does custom duty protect domestic industries?

Yes, custom duty can protect domestic industries by making imported goods more expensive compared to local products.
Harlon Moss
Dec 13, 2023

Is excise duty applicable on exported goods?

Typically, excise duty is not applied to exported goods as it primarily targets domestic consumption.
Sumera Saeed
Dec 13, 2023

Can custom duty rates change frequently?

Custom duty rates can change based on government policies, international relations, and economic conditions.
Sumera Saeed
Dec 13, 2023

What role does excise duty play in public health?

Excise duty on products like tobacco and alcohol can serve as a deterrent to reduce consumption for public health.
Aimie Carlson
Dec 13, 2023

How do excise duties contribute to government revenue?

Excise duties contribute significantly to government revenue, especially from high-consumption goods like fuel and tobacco.
Aimie Carlson
Dec 13, 2023

Are there any international standards for custom duties?

International standards for custom duties are guided by organizations like the World Trade Organization (WTO).
Sumera Saeed
Dec 13, 2023
About Author
Written by
Sumera Saeed
Sumera is an experienced content writer and editor with a niche in comparative analysis. At Diffeence Wiki, she crafts clear and unbiased comparisons to guide readers in making informed decisions. With a dedication to thorough research and quality, Sumera's work stands out in the digital realm. Off the clock, she enjoys reading and exploring diverse cultures.
Edited by
Sara Rehman
Sara Rehman is a seasoned writer and editor with extensive experience at Difference Wiki. Holding a Master's degree in Information Technology, she combines her academic prowess with her passion for writing to deliver insightful and well-researched content.

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