Excise Tax

Business, Legal & Accounting Glossary

Definition: Excise Tax

Quick Summary of Excise Tax

An excise tax is the tax placed on production or quantity purchased of a certain product.

Full Definition of Excise Tax

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).

Typical examples of excise duties are taxes on tobacco, alcohol and gasoline.

Excise Tax In The United States

An excise is “a tax upon manufacture, sale or for a business license or charter,” according to Law.com’s Legal Dictionary, and is to be distinguished from a tax on real property, income or estates.”

In the United States, the term excise means: (A) any tax other than a property tax or capitation (i.e., an indirect tax, or excise, in the constitutional law sense), or (B) a tax that is simply called an excise in the language of the statute imposing that tax (an excise in the statutory law sense, sometimes called a miscellaneous excise). An excise under definition (A) is not necessarily the same as an excise under definition (B).

Example: The Whiskey Tax that resulted in the Whiskey Rebellion which started in 1792.

Her Majesty’s Customs And Excise

Her Majesty’s Customs and Excise (HMCE) was, until April 2005, a department of the British Government in the UK. It was responsible for the collection of Value added tax (VAT), Customs Duties, Excise Duties, and other indirect taxes such as Air Passenger Duty, Climate Change Levy, Insurance Premium Tax, Landfill Tax and Aggregates Levy. It was also responsible for managing the import and export of goods and services into the UK. HMCE was merged with the Inland Revenue (which was responsible for the administration and collection of direct taxes) to form a new department, HM Revenue and Customs, with effect from 18 April 2003.

Excise In India

In India, an excise tax is levied on the manufacturer of goods when those goods leave the place of manufacture. Formerly called the Central Excise Duty, this tax is now known as the Central Value Added Tax (CENVAT). Manufacturers may offset duty paid on materials used in the manufacturing process by using that duty as a credit against excise tax through a process known as Central Value Added Tax Credit (CENVAT Credit). The offsetting process was formerly known as Modified Value Added Tax (MODVAT).

Cite Term

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Modern Language Association (MLA):
Excise Tax. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. September 22, 2021 https://payrollheaven.com/define/excise-tax/.
Chicago Manual of Style (CMS):
Excise Tax. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/excise-tax/ (accessed: September 22, 2021).
American Psychological Association (APA):
Excise Tax. PayrollHeaven.com. Retrieved September 22, 2021, from PayrollHeaven.com website: https://payrollheaven.com/define/excise-tax/

Definition Sources

Definitions for Excise Tax are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 5th August, 2021 | 3 Views.