What effect of gst on ppc
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Production Possibility Frontier will undergo a rightward shift. The reason for that is explained here under in detail :
Goods & Services Tax (GST) has an edge over the erstwhile Indirect Taxation system with regards to input tax credit. Previously while tax calculation the tax payer got input credit only for the Excise, Service and VAT portion. It means if CST, Customs or any other indirect taxes are payable during sale, no credit on such taxes could be setoff against the similar taxes paid during purchase of inputs for production. Unlike it, GST has optimal provision for availing Input Tax Credit, which has made GST cost efficient. Consequently, capital goods became cheaper than before causing multifold increase in domestic as well as Foreign Direct Investments. This has increased the production potential causing a rightward shift in the Production Possibility Frontier (PPF). The statement of an increase in investments is backed by the post GST statistical evidence of GFCF (Gross Fixed Capital Formation) that increased from 1.6% in Quarter I (Before GST) to 4.3% in Quarter
Goods & Services Tax (GST) has an edge over the erstwhile Indirect Taxation system with regards to input tax credit. Previously while tax calculation the tax payer got input credit only for the Excise, Service and VAT portion. It means if CST, Customs or any other indirect taxes are payable during sale, no credit on such taxes could be setoff against the similar taxes paid during purchase of inputs for production. Unlike it, GST has optimal provision for availing Input Tax Credit, which has made GST cost efficient. Consequently, capital goods became cheaper than before causing multifold increase in domestic as well as Foreign Direct Investments. This has increased the production potential causing a rightward shift in the Production Possibility Frontier (PPF). The statement of an increase in investments is backed by the post GST statistical evidence of GFCF (Gross Fixed Capital Formation) that increased from 1.6% in Quarter I (Before GST) to 4.3% in Quarter
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