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Illustrations · Q3

Q.State any four objectives that GST was designed to achieve.

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✓ Free question

GST was designed with several linked objectives in mind:

  1. Eliminate the cascading effect of taxation ('tax on tax'), through a seamless input tax credit chain.
  2. Create one unified national market, removing State-level tax barriers (like Entry Tax/Octroi at State borders) that fragmented trade.
  3. Simplify compliance, replacing multiple taxes, returns, and authorities with a single tax, return system, and portal.
  4. Broaden the tax base and reduce tax evasion, through invoice-matching and the input-credit mechanism.
  5. Boost overall economic growth and ease of doing business, by lowering compliance and logistics costs and removing inter-State tax friction.
  6. Harmonise Centre-State tax administration, through the GST Council as a joint constitutional forum for rate-setting and rule-making.

Any four of these six, clearly stated, fully answers the question.

✓Final answer

Any four of: eliminating cascading tax, creating one national market, simplifying compliance, broadening the tax base/reducing evasion, boosting growth/ease of doing business, and harmonising Centre-State tax administration via the GST Council.

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