Produced and become due for payment when then are physically removed from factory for sale. Remember duty is first paid by manufacturer on removal of goods from factory and then collected from customers when sales takes place because the sales price will include the excise duty. Sales Taxes are always first collected from customers during sales(sales price includes the tax) and then paid by the manufacturer to the sales tax authorities.

Excise Duty on a Commodity

The correct answer to the question is option 'A', which states that excise duty on a commodity is payable with reference to its production. In other words, excise duty is levied on the manufacturing or production process of a commodity.

Explanation:

Excise duty is a form of indirect tax that is levied on the production or manufacture of goods within the country. It is different from other forms of taxes, such as sales tax or value-added tax (VAT), which are levied on the sale or consumption of goods.

Excise duty is specifically imposed on goods that are produced or manufactured within the country, and it is typically collected by the government at the time of production or clearance of goods from the manufacturing premises. The duty is paid by the manufacturer or producer of the goods.

Key Points:

- Excise duty is payable with reference to the production of a commodity.
- It is imposed on goods that are produced or manufactured within the country.
- The duty is collected at the time of production or clearance of goods from the manufacturing premises.
- The duty is paid by the manufacturer or producer of the goods.

Why is the answer 'A' correct?

The answer 'A' is correct because excise duty is primarily levied on the production or manufacture of goods. It is not directly related to the sale or transportation of goods. The duty is imposed on the manufacturer or producer of the goods based on the quantity or value of the goods produced.

The purpose of levying excise duty on the production of goods is to generate revenue for the government and to regulate the production and consumption of certain goods. It serves as a means to control the production of goods that may have adverse effects on public health, safety, or the environment.

In conclusion, excise duty is payable with reference to the production of a commodity. It is an indirect tax levied on the manufacturer or producer of goods and is collected at the time of production or clearance of goods from the manufacturing premises.

Excise tax are taxes paid when purchased are made on a special good such as gasoline tobacco and alcohol .excise tax are intranational taxes imposed within a govt. infrastructure rather than international taxes imposed across country borders