Goods and Services Tax (GST) - Indirect tax. Indirect tax is a tax where the payer and the bearer of the tax are different people.
Income tax - Direct tax. Direct tax is a tax where the payer and bearer of the tax is the same person. Besides the objective of raising more revenue, the proposals also serve some welfare objectives.
∙ Firstly, raising Goods and Services Tax (GST) on cigarettes will make them more expensive. The price rise is expected to discourage cigarette smoking, which will positively impact the health of . people and raise their welfare.
∙ Secondly, raising income tax on income above Rupee one crore will reduce the gap between Mel rich and poor people. In other words, income inequalities will reduce.
∙ Thirdly, the extra revenue raised from these proposals could be spent on health education and otherl welfare enhancing schemes to improve the welfare of the poor.
