The main differences between excise and VAT (Value Added Tax) are: Point of collection: Excise tax is levied at the moment of manufacture or when the product enters the country, while VAT is charged at every step of the supply chain from the manufacturer to the end consumer.
Taxable amount: Excise tax is typically a per-unit tax, costing a specific amount for a volume or unit of the item purchased, whereas VAT is an ad valorem tax, meaning it is proportional to the price of the good.
Range of products: Excise tax typically applies to a narrow range of products, while VAT is charged across a wider range of goods and services.
Payment: Excise duty is paid by the manufacturer, while VAT is collected from the end consumer who has to pay this amount to the seller. Both excise and VAT are indirect taxes that add to the government's revenue, but they differ in their application and collection methods. Excise tax is focused on specific goods produced or imported, while VAT is applied more broadly across various goods and services throughout the supply chain.