Question

Excise duty is a:

• A. Direct tax
• B. Indirect tax
• C. Cooperation tax
• D. Value added tax

Answer 1

The correct option is B Indirect tax

An indirect tax is a tax which is imposed on one person and is paid partly or wholly by another party. This means that the effect or incidence of an indirect tax is not upon the party who pays the tax but on someone else. examples of indirect taxes are value added tax, excise duty, service tax. An excise duty is a type of indirect tax that is levied on the sales of particular goods. This tax is not paid directly by the customer but is passed on to the consumer by a merchant or producer of goods as a part of the price of the product.