Excise Duty
Taxation Intermediateउत्पाद शुल्क
Definition
Excise duty is a tax on goods manufactured in India. After GST implementation, Central Excise duty is now levied only on petroleum products (petrol, diesel, ATF, natural gas) and tobacco. States levy excise on alcohol. For petroleum, excise is a major revenue source that is not part of the GST regime.
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Why Excise Duty Matters
Understanding excise duty is essential for anyone following government finances, preparing for competitive exams, or analysing India's economic policy. This concept directly affects how the government allocates resources and plans its fiscal strategy.
In the context of India's Union Budget 2026-27, with a total size of Rs 53.47 lakh crore, terms like excise duty help citizens and analysts evaluate whether the government is on the right fiscal path. The numbers in the budget are only meaningful when one understands the underlying concepts.
For UPSC aspirants, excise duty is frequently tested in both Prelims and Mains, particularly in Paper III (Economic Development). For CA and MBA students, this concept appears in public finance and macroeconomics courses.
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