Difference Between Duty and Tariff

Both duties vs. tariffs are different forms of taxes. Tariffs are taxes the government imposes on goods imported from another country. In contrast, duties are taxes imposed on the consumer for imported goods, local goods, and intrastate transactions.

This article looks at the differences between Tariffs and duties in detail.

What is aTariff?

Tariffs are taxes the government imposes on goods imported from a different country. If the government imposes tariffs on imported goods, the prices of that goodwill increase in the domestic market. As a result of imposing tariffs on goods, the quantity of that good imported from the international market will decrease, and the supply of that goodwill will increase in the domestic market.

  • Tariffs are of two types one is an import tariff, and the other one is an export tariff. The tariff imposed on imported goods is the import tariff. Similarly, the tariff imposed on the export goods is known as export tariffs. The government imposes import or export tariffs because it increases the government’s revenue in terms of tariff collection.The short result of imposing tariffs is foreign exporters, importers lose, domestic producers gain, and the government gains from the tariff revenue.

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What is Duty?

Duty is another tax the government imposes on goods imported into the domestic country. This duty is popularly known as import duty. Duty is also imposed on the goods manufactured within the country.

  • Though less frequent regarding the number of goods covered, duty is also imposed on some export goods. That type of duty is popularly known as the export duty.Unlike tariffs, duties are indirect and considered as indirect taxes.A duty is considered an indirect taxIndirect TaxIndirect tax, also known as consumption tax, is the type of tax the person does not directly bear. In contrast, the incidence of such taxes is passed on to the end consumer of goods or services by adding such taxes to the value of those goods or services, like Excise duty, Service tax, VAT, etc.read more because it is somewhat similar to a consumer tax. The government imposes a duty on the consumer who will import that particular item from an international country to the domestic country.The few types of popularly known duties are excise duties and customs duties. The import duty imposed on the goods imported from a foreign land is known as the customs duty. The kind of tax imposed on the goods manufactured and are part of the intrastate transaction is known as the excise duty.

Duty vs. Tariff – Infographics

Here we provide you with the top 5 difference between Duty vs. Tariff.

Duty vs. Tariff Head to Head Difference

Let’s now look at the head to head difference between Duty vs. Tariff.

Conclusion

The government imposes different types of taxes on its citizens or the nationals of other countries. Both the words tariff vs. duties refer to taxes imposed. The use of these terms is often in place of each other, but there is a thin line of difference between the two terms.

Tariffs are direct taxes, whereas duties are indirect taxesIndirect TaxesIndirect tax, also known as consumption tax, is the type of tax the person does not directly bear. In contrast, the incidence of such taxes is passed on to the end consumer of goods or services by adding such taxes to the value of those goods or services, like Excise duty, Service tax, VAT, etc.read more. The imposition of Tariffs is on goods, whereas duties are on consumers. Tariffs can be of two types- import tariffs and export tariffs. Duties, on the other hand, include excise duties and customs duties.

The government imposes tariffs and duties because that increases the revenue of the government in tax collection. The short result of imposing tariffs and duties on goods imported or exported is foreign exporters, importers lose, domestic producers gain, and the government gains by tax revenue.

This article is a guide to Duty vs. Tariff. Here we discuss the top difference between Duty and Tariff, infographics, and a comparison table. You may also have a look at the following articles –

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