Economics · Public Finance
A GST-registered business, a dealer in computers, purchases 100 laptops (inputs) and pays Rs. 1,80,000 as GST. They then sell these laptops and collect Rs. 2,50,000 as GST (output tax). Before paying the government, the business utilizes its Input Tax Credit (ITC). What is the fundamental problem that ITC aims to eliminate?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The problem of revenue leakage to the State of origin
- 2The problem of double taxation (tax on tax) or the cascading effect✓
- 3The problem of regressive taxation
- 4The problem of non-compliance in tax filing
Correct answer
The problem of double taxation (tax on tax) or the cascading effect
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Public Finance MCQs →Want more practice questions on Public Finance?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Public Finance