Excise Tax Registration

The excise tax is an indirect tax levied at the time of manufacturing of a specific product. This tax is not directly paid by the consumer. The internal revenue services (IRS) charges this tax from the producer or the merchant at the time of manufacturing but producer include this tax in product price and pass the same to the consumer. Finally, Buyer pays the tax.

It is considered as indirect tax as the producer of the goods who pays the tax to the government tries to recover their loss by passing it to the final buyer of goods. It is sometimes referred as tax but is specifically a duty. Technically, A Tax is levied on an individual whereas duty levied on particular goods. Excise tax is distinguished from a sales tax or VAT in the following ways –

• Excise is typically a per unit tax charged on volume or unit of the item purchased whereas sales tax is a tax paid on the sale of certain goods & services.
• Excise tax applies to narrow range of products
• Excise tax is typically higher from the sales tax or VAT.