Economics • Indian EconomyEasy
What is the primary objective of the Goods and Services Tax (GST) implemented in India through constitutional amendments?
A. To replace a multiplicity of indirect taxes with a unified national tax structure and eliminate cascading tax effects✓ Correct Answer
B. To impose direct income taxes on agricultural landholdings nationwide
C. To abolish all import duties on foreign luxury goods entering domestic markets
D. To collect corporate social responsibility funds for rural infrastructure development
💡 Solution & Explanation
The Goods and Services Tax was introduced through the 101st Constitutional Amendment Act, 2016, to subsume various central and state indirect taxes such as excise duty, service tax, and value added tax. By establishing a destination-based consumption tax, it eliminates the cascading effect of tax on tax and creates a unified common market across India. Agricultural income remains exempt from direct income taxation under constitutional provisions. The GST Council oversees rate adjustments and administrative procedures.
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