Multiple choice

In which of the following does the impact and incidence fall on the different persons?

  1. Custom duty

  2. Income Tax

  3. Wealth Tax

  4. Capital Gains Tax
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A Correct answer
Explanation

It is custom duty. Custom duty is an indirect tax. Hence, its impact and incidence falls on different persons. The custom duty is paid by the importer of the commodity, but is charged from the customer to whom the commodity is sold, as it is included in the price. Hence, its impact falls on the importer and its incidence falls on the consumer who ultimately pays for it.

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