Question

GST is a

• A. Direct tax levied on income.
• B. Single tax replacing multiple indirect taxes.
• C. Tax on wealth.
• D. State-level direct tax.

Hint:

GST is a comprehensive tax that has unified various indirect taxes into one, making the taxation system more transparent and efficient.

Answer 1

The Correct Option is B

Step 1: Understanding GST.
GST (Goods and Services Tax) is a single tax levied on the supply of goods and services, which replaces a variety of indirect taxes that were previously imposed by both the central and state governments. These taxes included VAT, service tax, excise duty, etc.

Step 2: Explanation of options.
- (A) Direct tax levied on income: Incorrect. GST is an indirect tax, not a direct tax like income tax.
- (B) Single tax replacing multiple indirect taxes: Correct. GST replaces multiple indirect taxes such as VAT, excise, and service tax.
- (C) Tax on wealth: Incorrect. Wealth tax is a separate tax, not related to GST.
- (D) State-level direct tax: Incorrect. GST is levied on both central and state levels, but it is not a direct tax.

Step 3: Conclusion.
Therefore, GST is a single tax that replaces multiple indirect taxes.

Final Answer: Single tax replacing multiple indirect taxes.