What is/are the most likely advantages of implementing Goods and Services Tax (GST)? 1.It will replace multiple taxes collected by multiple authorities and will thus create a single market in India. 2.It will drastically reduce the Current Account Deficit

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Q: 81 (IAS/2017)
What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’?
1.It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
2.It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves.
3.It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future.
Select the correct answer using the code given below:

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,100,33,100,6,14,13

keywords: 

{'gst': [0, 0, 0, 3], 'services tax': [0, 0, 0, 1], 'multiple taxes': [0, 0, 0, 1], 'likely advantages': [0, 0, 0, 1], 'goods': [0, 1, 5, 27], 'economy': [1, 3, 8, 35], 'single market': [0, 0, 0, 1], 'current account deficit': [0, 0, 0, 4]}

The question is asking about the advantages of implementing the Goods and Services Tax (GST) in India.

Option 1 states that GST will replace multiple taxes collected by several authorities, thereby creating a single market in India. This is a realistic advantage of GST as it is known to amalgamate several Central and State taxes into a single tax, simplifying the tax structure.

Option 2 proposes that GST will drastically reduce India`s `Current Account Deficit` and increase its foreign exchange reserves. However, this statement lacks accuracy. GST affects internal tax structure and system, not directly influencing India`s Current Account Deficit or foreign exchange reserves.

Option 3 suggests that GST will greatly increase the growth and size of the Indian economy and enable it to overtake China in the near future. While GST can potentially aid in economic growth by simplifying the tax system, it`s not accurate to suggest it will cause India`s economy to overtake that of China in the near future solely due to implementing GST.

Hence, the correct answer is 1. Option 1 is the only realistic and direct advantage of implementing GST among the given choices.