What is the Difference Between Duty and Tariff?

The main difference between duty and tariff lies in the way they are imposed on goods and products. Both duty and tariff are types of taxes imposed on goods imported and exported to and from one country to another. However, they differ in their nature and application. Here are the key differences between duty and tariff:

1. Nature of Tax: Duties are indirect taxes imposed on the consumer for imported goods, local goods, and intrastate transactions. In contrast, tariffs are direct taxes imposed by the government on goods imported from a different country.
2. Purpose: Both duty and tariff aim to protect native industries and firms, thereby leading to the reduction of trade deficits and generating significant income for the government.
3. Product Classification: Tariffs are fees applied to specific products from specific countries for specific times. On the other hand, duties are based on product characteristics, such as the Harmonized Tariff Schedule (HTS) codes, which determine the rate of duty to be charged on specific products.
4. Implementation: Tariffs can be implemented relatively quickly, while duties are usually determined by international trade negotiations and can range from 0% to 30-40% of the import value of the product.
5. Payment: Duties are usually paid by the importer to customs, while tariffs are a tax that adds to the cost borne by the consumers of imported goods.

In summary, duties are indirect taxes imposed on the consumer of imported goods, while tariffs are direct taxes applied to goods imported from a different country. Both types of taxes aim to protect domestic industries and generate revenue for the government.

Comparative Table: Duty vs Tariff

The main difference between duty and tariff lies in the way they are imposed on goods and products. Here is a table summarizing the differences between duty and tariff:

Both duty and tariff are types of taxes imposed on goods imported and exported to and from one country to another, with the purpose of protecting native industries and firms, generating income for the government, and reducing trade deficits. However, duties are indirect taxes, while tariffs are direct taxes.