Read the passage carefully and answer the questions based on the passage:
GST: One Nation, One Tax, One Market
GST is the biggest tax reform in the country since independence and was rolled out on the mid-night of 30 June/1 July, 2017 during a special midnight session of the Parliament. The 101th Constitution Amendment Act received assent of the President of India on 8 September, 2016. The amendment introduced Article 246A in the Constitution cross empowering Parliament and Legislatures of States to make laws with reference to Goods and Service Tax imposed by the Union and the States. Thereafter CGST Act, UTGST Act and SGST Acts were enacted for GST. GST has simplified the multiplicity of taxes on goods and services. The laws, procedures and rates of taxes across the country are standardised. It has facilitated the freedom of movement of goods and services and created a common market in the country. It is aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets. It will also result into higher economic growth as GDP is expected to rise by about 2%. Compliance will also be easier as all tax payment related services like registration, returns, payments are available online through a common portal www.gst.gov.in. It has expanded the tax base, introduced higher transparency in the taxation system, reduced human interface between Taxpayer and Government and is furthering ease of doing business.
Which of the following is not an advantage of GST?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → It has increased the cost of business operations.
The passage says that GST is aimed at reducing the cost of business operations. So a rise in that cost cannot be an advantage of GST.
The passage gives the other three as its gains. GST has created a common market, reduced the cascading effect of taxes on consumers and made Indian products more competitive. Cascading means tax being charged on tax already paid at an earlier stage.
Note: The passage of this question is taken from the box ‘GST: One Nation, One Tax, One Market’ of the chapter ‘Government Budget and the Economy’ of the NCERT book (Introductory Macroeconomics). A single box can supply a whole set of questions, so read every box with its chapter.
NCERT (2026-27): “Box 5.3: GST: One Nation, One Tax, One Market … GST is the biggest tax reform in the country since independence and was rolled out on the mid-night of 30 June/1 July, 2017 during a special midnight session of the Parliament. … GST has simplified the multiplicity of taxes on goods and services. The laws, procedures and rates of taxes across the country are standardised. It has facilitated the freedom of movement of goods and services and created a common market in the country. It is aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets.…” |