(a) Explain how Goods and Services Tax (GST) has simplified the multiplicity of taxes imposed on goods and services. (b) State the meaning of Commercialisation of Agriculture.

Question

Accepted Answer

(a) **GST Simplifying Multiplicity of Taxes:**

GST (Goods and Services Tax) simplified the multiplicity of taxes by:
1. **Unified Tax System:** Replaced multiple indirect taxes like excise duty, service tax, VAT, entry tax etc. with single tax
2. **One Nation, One Tax:** Created common national market across states
3. **Input Tax Credit:** Allowed credit of taxes paid on inputs, eliminating cascading effect
4. **Simplified Compliance:** Single return filing for all taxes
5. **Reduced Tax Evasion:** Through digital tracking and compliance

(b) **Commercialisation of Agriculture:**
- Growing crops for sale in market rather than for self-consumption
- Shift from subsistence farming to commercial farming
- Production of cash crops for export market
- Led to rise in prices of food grains
- Increased income for farmers but also increased vulnerability to market fluctuations