Reason (R) is true: The Goods and Services Tax (GST) system, through the input tax credit mechanism, eliminates the cascading effect of taxes (tax- on-tax) that existed in the previous indirect tax regime. Assertion (A) is true: By removing the cascading effect and rationalizing taxes, GST was designed and intended to be non-inflationary, potentially reducing the final price of goods and services compared to the cumulative burden of previous taxes. R provides the mechanism by which A is expected to be true.
Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R). Select your answer from the codes given below. Assertion (A): Goods and Services Tax (GST) introduced in 2017 is non-inflationary. Reason (R): GST system avoids tax-on-tax.
Asked in APPSC Group 1 Prelims 2023 · Topic: The Governance System (Government Policies and Interventions for Development)
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