Statements:** Should all the indirect taxes in India be combined into a single tax on all commodities?

**Arguments:**
I. Yes. This will considerably simplify the tax collection mechanism and the cost of collecting tax will also reduce.
II. Yes. The manufacturers and traders will be benefited by this which in turn will boost tax collection.
III. No. No other country has adopted such system.

Question

Statements:** Should all the indirect taxes in India be combined into a single tax on all commodities?

**Arguments:**
I. Yes. This will considerably simplify the tax collection mechanism and the cost of collecting tax will also reduce.
II. Yes. The manufacturers and traders will be benefited by this which in turn will boost tax collection.
III. No. No other country has adopted such system.

Accepted Answer

**Solution:**

1. Argument I states that combining all indirect taxes into a single tax will simplify the tax collection mechanism and reduce the cost of collecting tax. This is a strong argument because simplification and cost reduction are valid benefits.

2. Argument II states that manufacturers and traders will benefit, which will boost tax collection. This is also strong because easier tax compliance can encourage better reporting and collection.

3. Argument III claims that no other country has adopted such a system, implying it should not be done. This is a weak argument because the adoption of a policy should be based on its merits, not on imitation or lack thereof.

Hence, only arguments I and II are strong. Since option (e) 'None of these' corresponds to this conclusion, it is the correct answer.

**Answer:** (e) None of these

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