Consider the following statements regarding Excise duty 1 Excise duty is an indirect tax levied on t...........

Economic Affairs Tax System

Consider the following statements regarding Excise duty:

1. Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption.

2. The manufacturer is able to pass the incidence of the excise duty to the final consumer.

Which of the above statements is/are correct?

1 only

1 and 2 only

2 only

None of the above

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Explanation:

Central Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption. The taxable event is 'manufacture' and the liability of central excise duty arises as soon as the goods are manufactured. It is a tax on manufacturing, which is paid by a manufacturer, who passes its incidence on to the customers.