Difference Between Shares Duty vs Tariff
Duty is kind of tax imposed on specific commodities, financial transaction, goods, etc. which are imported in the domestic country and the goods which manufactured within the country. Duty is nothing but the amount of money paid on imported or exported products. The tariff is a kind of tax that is levied on the import of goods and services from other countries by a government for protective purposes and revenue purposes. Generally, Tariff is imposed by the government to restrict the trade from a particular country or to reduce the import of specific types of goods and services. Tariff increases the prices of foreign goods and services and thus it makes them more expensive for the final beneficiary that is to customers. Tariff actually acts as a barrier between the free trade between countries. The tariff also can be levied on both upon export and import.
Duties are indirect in nature and hence they are considered as an indirect tax because it is somewhat similar to consumption tax. So duty means money to be paid. Imported duty and Exported duty vary from country to county and country around the world levy duties on import and export of goods to raise revenue and to protect domestic industries from foreign competition. Duty Rate varies from product to product.
There different type of duties as mentioned below:
- Import Duty: The duty which is imposed on goods that are imported from other countries to the domestic country is popularly known as Import duty. Import duty is also called a customs duty.
- Export Duty: If goods are exported outside the country then the government will charge some taxes on those goods such taxes are called an export duty. This duty also called an excised duty. So export duty is nothing but the charges imposed on goods which are produced within the country.
Tariff increases the prices of imported goods and because of this domestic producer need not reduce their prices from increased competition and because of these domestic consumer has to pay a higher price for imported goods. Tariffs are useful to a nation as they help in increasing revenue for the governments and also help in increasing the GDP of the country.
There are several types of Tariffs that government can impose and below two types of tariffs are important and regularly applied.
- Specific Tariff: Fixed Tariff on one unit of goods imported and vary according to the type of goods imported.
- Ad Valorem Tariff: Certain percentage of a tariff is calculated on the total value of the imported item.
Let’s Say XYZ person is the importer of shoes, and he imports shoes to India total worth of Rupees 2,00,000.00 and the corresponding India tariff would be taxed percentage, which in this case suppose 5% so the duty of XYZ person which he needs to pay to the government of India is Rupees 10,000.00
- Recently US President sharpens a trade war with China by imposing new tariffs of 200bn dollars on Chinese goods exported to the US market from China.
Head To Head Comparison Between Shares Duty vs Tariff (Infographics)
Below is the top 5 difference between Duty vs Tariff
Key Differences Between Duty vs Tariff
Both Duties vs Tariff are popular choices in the market; let us discuss some of the major Difference Between Duty vs Tariff
- Duty vs Tariff both themselves are a type of tax and sometimes used interchangeably.
- If the government and economy are mentioned in that case word tariff is more correctly used and if rates are discussed and the amount is mentioned then the word used is a duty.
- Duty is the amount of money paid by the importer or exporter of goods and services according to a tariff.
- Duty is a fee payable to the government on the import and export of goods as per the tariff rates decided or imposed by a government.
- Two major types of duties are the customs duty and exercise duty whereas two major types of tariffs are specific tariff and ad valorem tariff.
- Both add revenue to the government and both are levied by the government.
- In general, tariffs are imposed on goods whereas duties are imposed on the customer.
Duty vs Tariff Comparison Table
Below is the topmost comparison between Duty vs Tariff
|The Basis Of comparison between Shares Duty vs Tariff||Duty||Tariff|
|Meaning||Duty is kind of indirect taxes imposed by the government on specific commodities, financial transaction, goods, and services which are imported or exported.||A tariff is direct taxes imposed on imported and exported goods and services by the government.|
|Nature||Duty is similar to indirect taxes.||A tariff is similar to Direct taxes.|
|Type||Customs duty and Exercise duty.||Specific Tariff and Ad Valorem Tariff.|
|Price||Duties are collected an amount of income from tariff taxes.||A tariff is an amount that needs to be paid by the country for the import and export of goods.|
|Income||To Government.||To Government.|
Conclusion – Duty vs Tariff
So from the above study, it is clear that Duty vs Tariff is the form of taxes and use interchangeably. A tariff is a form of duty or tax imposed on goods and services when they transport from one customer area to another whereas duties are the collected amount from tariff taxes. Both are levied on goods and financial transactions. Both Duty vs Tariff act as tools to control international trade and encourage production within the home country. The government imposes duties and tariffs to increase the revenue of the government in terms of tax collection. In short tariffs and duties are restrictions used to control foreign products entering the domestic market of the country. With the effect of tariffs and duties, the consumer surplus goes down whereas producer surplus increases due to an increase in prices of the product.
In India, both are administrated by the department of revenue which works under the control of the Ministry of Finance.
This has been a guide to the top difference between Duty vs Tariff. Here we also discuss the Duty vs Tariff key differences with infographics and comparison table. You may also have a look at the following articles to learn more