The key difference between Duty vs Tariff is that Duty is the tax that is imposed by the government on the goods and services that are manufactured and sold within a country as well as on the goods and services that are imported from another country, whereas, tariff is imposed by the government only on the goods or services imported between different countries to protect the business of domestic manufacturers and suppliers by reducing the level of competition.
Difference Between Duty and Tariff
Both duties vs. tariffs are different forms of taxes. Tariffs are the taxes that the government imposes on the goods imported from another country. In contrast, duties are taxes imposed on the consumer for imported goods, local goods, and also for intrastate transactions.
In this article, we look at the differences between Tariffs and Duty in detail.
What is Tariff?
Tariffs are taxes that are imposed by the government on the 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 a good, the quantity of that good imported from the international market will decrease, and the supply of that goodwill 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 reason why the government imposes import or export tariffs is that it increases the revenue of the government in terms of tariff collection.
- In the short result of imposing tariffs is foreign exporters and importers lose, domestic producers gain, and the government gains by the amount of the tariff revenue.
What is Duty?
Duty is another kind of tax imposed by the government on the goods imported in 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 in terms of the number of goods covered, duty is also imposed on some export goods as well. 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 to be an indirect tax 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.
|Basis – Duty vs. Tariff||Duty||Tariff|
|Definition||Duty is a kind indirect tax imposed by the government on the consumer and is imposed on both for goods that are imported and goods manufactured locally and are part of an intrastate transaction.||Tariffs are taxes that are imposed by the government on the goods imported from a different country.|
|Nature||Duties are similar to indirect taxes and are imposed on consumers. Duty is also popularly known as the consumer tax.||Tariffs are similar to direct taxes imposed on imported and exported goods.|
|Types||The kind of popular duty is exciting duties and customs duties.||Tariffs can import tariffs or export tariffs based on the tariff imposed on imported goods or exported goods.|
|Goods covered||Duties imposed on the import of goods is known as customs duty. Duty on goods manufactured domestically and part of an intrastate transaction is known as excise duty.||Tariffs are imposed on goods imported or exported by the manufactures of a country to an international country.|
|Secondary Uses||The other uses of duty include import duties, excise duties, succession or death duties, and stamp duties.||The other uses of tariff include a general list of prices.|
There are different types of taxes that the government imposes 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 taxes. The imposition of Tariffs is on goods, where but 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 terms of tax collection. In the short result of imposing tariffs and duties on goods imported or exported are foreign exporters and importers lose, domestic producers gain, and the government gains by the amount of the tax revenue.
This article has been a guide to Duty vs. Tariff. Here we discuss the top difference between Duty and Tariff along with infographics and comparison table. You may also have a look at the following articles –