Difference Between Tax And Duty

Difference Between Tax And Duty

The major dissimilarities or difference between tax and duty can be highlighted as follows:

1. Introduction

Tax: Financial charge imposed by the government to the individuals and firms. It is a major source of government revenue.

Duty: It is a type of tax levied by the central government on imported or exported commodities.

2. Imposed On

Tax: It is imposed on commodity and individuals

Duty: It is imposed only on products or goods

3. Classification

Tax: It can be classified into direct tax (income tax) and indirect tax (value added tax)

Duty: It can be classified into excise duty (for export of goods) and custom duty (for imported goods)

4. Scope

Tax: It has a broader scope than duty because duty is also included in tax.

Duty: It has limited scope because it is a part of tax

5. Levied By

Tax: It is generally levied by state or local governments of the country

Duty: It is always levied by the central government

                

    Also Read: Direct Tax Vs Indirect Tax

6. Examples

Tax: Income tax, value added tax, wealth tax , sales tax etc.

Duty: Custom duty and export duty.

Tax Vs Duty (Comparison Chart)

Basis	Tax	Duty
Introduction	Amount of money charged to individuals or firms by the government	Tax levied by the government on import or export of commodities
Imposed On	Commodity/Individuals	Products Only
Classification	Direct tax and indirect tax	Excise duty and custom duty
Scope	Broader	Limited
Levied By	Local Government	Central Government
Example	Income tax, VAT, Wealth tax etc.	Custom duty, export duty etc.

I hope this post is helpful to understand the difference between tax and duty and to make comparison between them.