Indirect Tax - Excise Duty

Excise Duty

Excise Duty is a governmental tax meant for producers and manufacturers on certain goods.

Manufacturers are considered to be:

1. Entities who manufacture goods themselves
2. Entities who pay a fixed salary for other to manufacture these goods
3. Entities who outsource manufacturing, but manufacturing takes place from their name

To cover these costs, manufacturer adds them to COGS (costs of goods sold), where the buyer ends up paying for these costs. Thus, it is considered to be an indirect tax.