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Statement: Should all the indirect taxes in India be combined into a single tax on all commodities? Arguments: Yes. This will considerably simplify the tax collection mechanism and the cost of collecting tax will also reduce. Yes. The manufacturers and traders will be benefited by this which in turn will boost tax collection. No. No other country has adopted such system.

Correct Answer: None of these

Explanation:

Only I and II are strong. Clearly, both I and II hold strong, as they provide very convincing reasons, for a single tax system would help get rid of multifarious taxes on a product. Besides, the idea of imitation of other countries in the implementation of a certain policy holds no relevance. So, argument III does not hold strong.

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