Simplifying the tax system
Leading to potential revenue loss initially
Reducing the state's tax autonomy
All of the above
Answer is Right!
Answer is Wrong!
The correct answer is: d) All of the above
The implementation of the Goods and Services Tax (GST) has impacted Nagaland’s finances by:
- Simplifying the tax system. The GST is a single, unified tax that replaced a number of different taxes, including the Value Added Tax (VAT), Central Sales Tax (CST), and Excise Duty. This has simplified the tax system for businesses and made it easier for them to comply with tax laws.
- Leading to potential revenue loss initially. The GST is a destination-based tax, which means that it is levied on the value added at each stage of the supply chain, but is collected only at the final point of consumption. This means that states that are not major consumption centers, such as Nagaland, may see a decline in their tax revenue initially.
- Reducing the state’s tax autonomy. Under the GST regime, states have lost some of their autonomy in setting tax rates. The GST Council, which is a body comprising representatives of the central government and all the state governments, is responsible for setting the GST rates. This has reduced the ability of states to tailor their tax rates to their specific needs.
Despite these challenges, the GST is a positive step for Nagaland’s economy. The GST is expected to boost economic growth and investment in the state. It is also expected to make it easier for businesses to do business in Nagaland. In the long run, the GST is expected to benefit Nagaland’s economy and its people.