Which of the following is true about excise duties?

• A. They are levied on sale/use of a specific product
• B. They are applied equally to all goods
• C. They are paid by consumers directly on income
• D. They are the same as a value-added tax

Answer: (A)

Excise duties are taxes targeted at specific goods rather than a general tax on all products. They are levied on the sale or use of particular items—such as tobacco, alcohol, or petrol—often added to the price and collected from producers or retailers. They’re not paid by consumers as an income tax and they’re not applied to all goods; VAT is a broader consumption tax applied to most goods and services, calculated on value added rather than tied to a specific product. So the true statement is that excise duties are levied on sale or use of a specific product.