Originally Posted by newstudent

@Irum Siddiqui

From your questions, it seems you have little idea about GDP and GST. I will try to explain in simple words to make things easy.

GDP:
It is abbreviation of Gross Domestic Product. This is overall value of whatever has produced in a country in one year.

It is made of four things.
First is what we spend on our consumption (I mean all the population of Pakistan).
Secondly what we invest on our factories, equipments, etc that can produce some thing in future. Like factories can produce new things for us in future.
Thirdly, what our government spend on its various functions.
Fourthly, the difference between the exports (i.e. things we send to other countries) and imports (things we get from other countries).

So our GDP is proportional to all these four things.

GST:

It is abbreviation of General Sales Tax. This tax is levied on things we consume. For example if you buy a pepsi bottle, then you can see their that in the place where price is written includes GST along with factory price. The factory price goes to company, while GST is collected by pepsi company, which government takes after some time. Now GST is 17 percent, so anything on which GST is levied, if its factory price is 100 rupees, then 17 rupees ultimately go to government.

Regarding proportionality, you can see if people consume more things, more GST will go to government. It is also called indirect tax.