Identify the correct option which describes the objective of the Goods and Service Tax (GST) ?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Creating a unified tax for the nation
Goods used to be taxed by the Centre and by each state under many separate indirect taxes. The Goods and Services Tax (GST), in force from 1 July 2017 after a constitutional amendment of 2016, replaced them with a single tax for the whole country. Its aims were:
A unified tax: it replaced a large number of central and state indirect taxes on goods and services with one tax, so as to create ‘one nation, one tax and one market’, a common national market for goods.
More revenue for the government.
Less tax evasion.
NCERT (2025-26): “Tax Reforms: … Efforts have also been made to reform the indirect taxes, taxes levied on commodities, in order to facilitate the establishment of a common national market for goods and commodities. In the year 2016, Indian constitution was amended to empower state governments and union Government to come out with laws to impose Goods and Services Tax. This has led to introduction of GST in India. This is expected to generate additional revenue for the government, reduce tax evasion and create ‘one nation, one tax and one market’.…” |