Question

What is the effect of GST on national income?

Answer 1

Income received by the Government in the form of taxes (SGST, CGST, UTGST, IGST and cesses) will be divided between the Centre and the States. SGST will go to the State Governments, CGST will go to the Central Government and IGST would be apportioned between the State and the Central Government.

GST will boost up the national income as it will widen the tax bracket. Following are the reasons why GST will increase the national income from taxes –

1. The definition of supply is very broad covering a large number of transactions under GST taxability.

2. There is a strict cross check mechanism under matching of invoices and credit availability. Hence people evading taxes earlier in the unorganized sector will now have to come under the ambit of organized sector to stay in the market.

3. PAN India threshold limit for GST applicability is Rs. 20 lakhs as against individual limits for VAT, Service Tax and Excise.

4. There is compulsory registration for inter-state supply, e-commerce operator, agent, input service distributor (ISD), casual and non-resident taxable person.

5. Overall exemptions given under existing laws will not be available under GST.

In the long term, GST will be clearly positive as gains from a more efficient tax system, greater price competitiveness (reduced costs), and the removal of interstate tax barriers should boost growth via higher exports and investments, and higher government (Centre + State) tax revenues, enabling greater general government fiscal consolidation.

hope it helps you friend.

@ sk

Answer 2

the rate GST helps in bringing the more money