Geography Answer Writing Practice - Week 12 - Question 4
90 Days Geography Answer Writing Practice Question 2 for 21-Feb-2018
Instructions for Writing Answer1. Write your answers in the comment section.
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3. Model Answers will be uploaded on this page next day.
4. Rectify your mistakes and progress further.
5. All the Best.
21-Feb-2018 - Question 2
Goods and Service Tax (GST) has differential impact on developed and backward States of the country. How and why? 2017 (200)
GST is one of the greatest tax reform the country has seen since independence. The multiple tax collected by the government like service tax, excise, sales tax etc will be subsumed under GST as a single tax. This will remove the cascading effect of the tax on the economy and improve the competitiveness of the economy. Since the GST is completely automated it will improve the tax compliance and the tax to GDP ratio of India.
GST is a destination based tax which means the tax will accrue to the state where consumption of goods and services has taken place. This is different from the earlier tax system where the states involved in the manufacturing of goods and provision of services accrues all the tax benefit which improved their tax collection. The tax collection allowed these states to improve infrastructure and social welfare and attract investment.
In GST regime the states consuming the goods and service will accrue tax and it will improve their tax collection. This will allow the backward states to improve the infrastructure and social welfare. It will also push industries to relocate in the states consuming their goods and services and it will improve the manufacturing capabilities of the back word states.
The Developed states will suffer some loss of tax due to GST which may affect their plans but the Center has committed that any loss to states due to GST will be compensated by the centre.
Thus GST will bridge the development disparity between the developed and backward state which has been a major objective of policymakers in the country.