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GST Helping Government Generate More Direct Tax Revenue

GST Helping Government Direct Tax Revenue

Among the many changes and improvements the GST system brought to the Indian economy, a major increase has been reported in the direct tax revenues and corporate tax collection in the post-GST era. Even though GST is an indirect tax system, a rather confusing one and full of complexities, it has positively contributed to improving the direct tax collections as well. Here’s how.

The goods and services tax has a clause that requires it to share the indirect tax data with direct tax department to enable them to find out discrepancies between the income tax paid by people and their actual income. The step proved to have a positive impact as there has reportedly been an increase of around 18% in indirect tax revenue and a 17% growth in the corporate tax revenue, in the first quarter of the process implementation.

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The GST has contributed to the increasing direct taxes through a number of factors.

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All of this has resulted in a stronger system where tax evasion won’t be as easy as before.

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