Economics • Indian EconomyMedium
What was the primary objective of introducing the Goods and Services Tax (GST) in India through the 101st Constitutional Amendment Act?
A. To impose a uniform income tax rate on all salaried individuals regardless of earnings
B. To eliminate cascading tax effects by replacing multiple indirect taxes levied by the Centre and States with a comprehensive destination-based tax✓ Correct Answer
C. To abolish all direct taxes on corporate profits and capital gains
D. To centralize all tax collection powers exclusively under the central government without state sharing
💡 Solution & Explanation
The Goods and Services Tax, enacted via the 101st Constitutional Amendment Act, subsumed numerous central and state indirect levies like excise duty, service tax, and VAT into a unified destination-based tax, eliminating the cascading effect of tax-on-tax and creating a common national market. Other options incorrectly mention income tax or corporate profit levies. It revolutionized India's indirect tax structure and compliance architecture.
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