The excise tax is a type of indirect tax and it is levied on a specific good sale. The individual consumer does not require to pay this tax directly. The IRS (internal revenue service) charges this tax on the merchant or the producer who include this tax in the price of the product and pass this tax to the consumer. It also known as taxation penalty for transactions not eligible in the accounts of the retirement.

It is a tax, or inland tax on the production or the sale of specific goods or on a good manufactured for sold or sale within a licenses or country for certain activities. Excise is totally distinguished from customs duties. The custom duties are import duties. Excise are mainly levied apart from other indirect tax like VAT (value added tax) or sales tax.