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GST and prices
Will the proposed Goods and Services Tax (GST) result in
reduction of prices?
Well, price rise is a phenomenon affected only partially
by the indirect taxes. Yes, to the extent GST, which is
going to be tax on value addition, will lead to a
reduction in prices because Value-Added Tax (VAT)
eschews the cascading effect, that is, tax on tax and
tax on the preceding sales built into the current sale
already taxed. In a full tax, the government enriches
itself unduly each time the goods change hands either as
they are or as a part of the inputs that go into the
finished goods. |
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