Question

Does GST increases or decreases the price of a good

Answer 1

The impact of GST on the price of a good can vary depending on several factors. In general, the implementation of GST tends to increase the overall price of goods due to the tax being applied to the sale of the product. However, the extent of the price increase will depend on various factors, such as the tax rate, the supply chain structure, and whether the tax is passed on to consumers or absorbed by the business.

Additionally, GST is designed to simplify the tax system and eliminate cascading taxes, which could lead to lower overall production costs for businesses. This, in turn, could potentially lead to lower prices for consumers.

Overall, while GST may initially increase the price of goods due to the tax being applied, it could also have long-term benefits such as increased efficiency and potentially lower prices as businesses adjust to the new tax system.