Question : The introduction of the Goods and Services Tax (GST) in India aimed to:
Option 1: Promote fiscal federalism
Option 2: Increase tax rates for businesses
Option 3: Restrict foreign trade
Option 4: Nationalize key industries
Correct Answer: Promote fiscal federalism
Solution : The correct answer is (a) Promote fiscal federalism.
The implementation of the GST aimed to create a unified taxation system across the country by replacing multiple indirect taxes levied by the central and state governments. It aimed to streamline the tax structure, reduce tax evasion, and promote fiscal federalism by ensuring a fair distribution of tax revenues between the central and state governments. The GST brought together various taxes like excise duty, service tax, and sales tax under one comprehensive tax regime.
