Multiple choice

Which of the following taxes is imposed to provide protection to domestic industry?

  1. Excise duty

  2. Custom duty

  3. Value added tax

  4. Estate duty
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

It is custom duty. The custom duty is charged on goods imported from foreign country, which are domestically available and thereby encourage the domestic industry. The heavy custom duty is imposed so that the citizens of a country have to pay a very high price for it and hence they are forced to buy domestic products.

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