Economics · Taxation in India
Which of the following best explains the structural challenges faced by the Goods and Services Tax (GST) regime in India, and how do these challenges impact its effectiveness as a unified indirect tax system?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1GST implementation in India has led to complete automation of tax refunds, eliminating any delays or disputes.
- 2GST is a direct tax replacing income tax and corporate tax, thereby simplifying tax collection at the source.
- 3Despite GST's objective of a unified tax, challenges like complex multiple tax rates, frequent rate revisions, and issues in input tax credit (ITC) reconciliation create compliance burdens and slow down the ease of doing business.✓
- 4GST has eliminated all state-level taxes, but the absence of a central GST component leads to revenue shortfalls for the Union government.
Correct answer
Despite GST's objective of a unified tax, challenges like complex multiple tax rates, frequent rate revisions, and issues in input tax credit (ITC) reconciliation create compliance burdens and slow down the ease of doing business.
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