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Difference between Impact Incidence and Shifting of Taxation

Impact incidence refers to the individual or entity that is legally obligated to pay a tax. On the other hand, shifting of taxation is a concept where the burden of tax is transferred from the taxpayer to another party. For instance, if a manufacturer increases the cost of a product to offset the tax burden, the consumer ends up paying more. This is known as single point shifting. To dive deeper into this topic, check out the Goods and Services Tax Act – An Overview, Key Features and Criticisms .

There's also a type of taxation known as multi-point shifting. In this scenario, the tax burden is passed from the producer to the wholesaler, then to the retailer, and finally to the consumer.

For further insights, consider the following resources:

  1. Understanding Double Taxation Avoidance Agreements (DTAA) – Participating Countries, Tax Provisions
  2. Strategy, Syllabus & Structure of UPSC Mains General Studies Paper-III

Relevant Links

An Overview of Value Added Tax (Replaced by GST) – Differences with Income Tax, Limitations

India's Anti Tax Avoidance Law – General Anti-Avoidance Rule (GAAR)

Previous Years' Economics Mains Questions for UPSC General Studies Paper – 3

Comprehensive Economics Notes For UPSC Examination

Understanding Demand and Supply – Demand Curve, Supply Curve & Market Equilibrium

Topic-Wise GS 3 Questions for UPSC Mains

Understanding Minimum Alternate Tax (MAT) – UPSC Indian Economy Notes

An Overview of Carbon Tax – UPSC Notes

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