How do changes in the rates of excise and customs duties affect me ?
Excise duties are levied on items manufactured within the country and are paid by the manufacturer. Customs duties are charged when goods are imported into or exported from the country. A change in the rate of excise will make locally manufactured goods more or less expensive, depending on whether the manufacturer passes on the change to the customer. For example, if the excise duty on cigarettes is increased and the manufacturer hikes the rate accordingly, smokers are directly affected. When customs duties on imports change, imported goods become cheaper or costlier. In case they are items of common use, as a consumer, you feel the impact directly. When the imported goods form raw materials or capital goods (used to manufacture other items), the impact may be felt somewhere down the line. For example, if the customs duty on computer hard disk drives is reduced, computers will cost less. Similarly, if duties on exports change, the prices of Indian goods exported abroad change.
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