Question

Analyse the following statements and choose the correct option.

Assertion (A): Several indirect taxes were merged into one tax, the Goods and Services Tax.
Reasoning (R): There are various types of indirect taxes which makes it difficult to manage them and they increase the price of goods and services excessively.

• A. Both A and R are true, and R is the correct explanation of A.
• B. Both A and R are true, but R is not the correct explanation of A.
• C. A is false, but R is true.
• D. A is true, but R is false.

Answer 1

The correct option is A Both A and R are true, and R is the correct explanation of A.

The Goods and Services Tax or GST was introduced in India on 1 July 2017 with the motto 'One Nation, One Tax, One Market'. The GST rate is not the same for all goods. They are arranged under four tax slabs: 5%, 12%, 18%, and 28%. The goods and services fall under different slabs based on whether they are of daily use or a luxury. Moreover, almost all necessities like vegetables and food grains are exempted from GST.