Tax and duty
This query is : Resolved
03 January 2012
wht is the difference between duty and tax
05 January 2012
Duty
Duty is a type of tax that is levied upon goods imported from another country. It is also levied upon goods manufactured within the country such as excise duty. The word duty is mostly used in respect of goods such as custom duty, import duty, excise duty and so forth. Duty is levied only on goods and not on individuals. The most common example of duty is custom duty which is an indirect tax levied upon goods that are purchased from foreign countries and the buyer has to pay tax on them when they enter the country. Similarly, duty that is imposed upon goods going out of the country is called export duty.
Tax
Taxes are levied by a government to fulfil its obligations towards the citizens. They are the backbone of all the revenues generated by any government. Thus the money collected by the government from the private sector comes within the purview of taxes which includes duties. Taxes are obligatory and not involuntary which means that a person is punishable by law if he fails to pay his taxes.
Taxes can be direct or indirect such as income tax which is a direct tax and VAT which is an indirect tax.
Differences between Duty and Tax
- Both duty and tax are the revenues generated by a government for its effective functioning. Duty in broader terms is a kind of tax only. But there are differences between the two entities.
- Duty is levied upon goods only, whereas tax is levied on both goods and individuals.
- Tax is a term used in respect of income such as property tax, wealth tax, income tax etc, whereas duty is used in terms of goods only such as customs duty, excise duty.
- Duty is generally a tax levied on good going out or coming inside a country. Duties are sometimes referred to as border taxes.
- Higher duties are levied on some categories of products to discourage people from using them. Taxes are mostly progressive in nature.
Duty is a type of tax that is levied upon goods imported from another country. It is also levied upon goods manufactured within the country such as excise duty. The word duty is mostly used in respect of goods such as custom duty, import duty, excise duty and so forth. Duty is levied only on goods and not on individuals. The most common example of duty is custom duty which is an indirect tax levied upon goods that are purchased from foreign countries and the buyer has to pay tax on them when they enter the country. Similarly, duty that is imposed upon goods going out of the country is called export duty.
Tax
Taxes are levied by a government to fulfil its obligations towards the citizens. They are the backbone of all the revenues generated by any government. Thus the money collected by the government from the private sector comes within the purview of taxes which includes duties. Taxes are obligatory and not involuntary which means that a person is punishable by law if he fails to pay his taxes.
Taxes can be direct or indirect such as income tax which is a direct tax and VAT which is an indirect tax.
Differences between Duty and Tax
- Both duty and tax are the revenues generated by a government for its effective functioning. Duty in broader terms is a kind of tax only. But there are differences between the two entities.
- Duty is levied upon goods only, whereas tax is levied on both goods and individuals.
- Tax is a term used in respect of income such as property tax, wealth tax, income tax etc, whereas duty is used in terms of goods only such as customs duty, excise duty.
- Duty is generally a tax levied on good going out or coming inside a country. Duties are sometimes referred to as border taxes.
- Higher duties are levied on some categories of products to discourage people from using them. Taxes are mostly progressive in nature.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- CG Tax On residential property
- Post Office RD Interest
- Applicable TDS for Purchase of Flat from NRI
- Claiming exemption of perquisite for employee-owned car under New Tax Regime in ITR-2
- Eway bill for machinery reparing
- Under construction property in ITR
- Gift of mutual fund units to daughter
- Upload Level ValidationITR3Category of Defect B/D
- Reporting of STCG on Property in ITR
- Not able to file ITR
- ITR-4 vs ITR 5
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Delisted shares sold in off market/ Rebate u/s87A
- In Exports Sales HSN details where to fill
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- Difference in tax comparison report
- Gst invoice numbering and delivery challan numbering
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
