Question:
Explain how, Goods and Services Tax (GST) has simplified the multiplicity of taxes on goods and services.
Explain how, Goods and Services Tax (GST) has simplified the multiplicity of taxes on goods and services.
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GST creates a single market by replacing multiple taxes with one unified tax structure across India.
Updated On: Jun 27, 2025
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Solution and Explanation
The Goods and Services Tax (GST), implemented in 2017, is a unified tax system that replaced various indirect taxes levied at the central and state levels. It has simplified taxation in the following ways:
Single Tax Structure: GST subsumes multiple taxes like VAT, service tax, excise duty, and others under one umbrella.
Uniform Tax Rates: It provides a uniform tax structure across states, removing discrepancies and improving transparency.
Avoidance of Cascading Effect: GST is levied only on the value-added at each stage, preventing tax-on-tax and reducing the overall burden.
Ease of Compliance: A common digital platform (GSTN) has streamlined filing returns and tax payments.
Boosts Ease of Doing Business: Simplified tax structure improves investor confidence and business operations. Thus, GST has made the indirect tax regime simpler, more efficient, and business-friendly.
Single Tax Structure: GST subsumes multiple taxes like VAT, service tax, excise duty, and others under one umbrella.
Uniform Tax Rates: It provides a uniform tax structure across states, removing discrepancies and improving transparency.
Avoidance of Cascading Effect: GST is levied only on the value-added at each stage, preventing tax-on-tax and reducing the overall burden.
Ease of Compliance: A common digital platform (GSTN) has streamlined filing returns and tax payments.
Boosts Ease of Doing Business: Simplified tax structure improves investor confidence and business operations. Thus, GST has made the indirect tax regime simpler, more efficient, and business-friendly.
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