Q. Consider the following statements with reference to Goods and Services Tax (GST):
1.GST has been successful in facilitating the free movement of goods in the country.
2.GST harms producer states and rewards consumer states in terms of revenues.
3.GST has given more autonomy to the states in term of taxation and has reduced their dependence on the central government.
Which of the statements given above are correct?

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: A
Notes:

Explanation –

Statement 1 and 2 are correct. GST has been successful in facilitating the free movement of goods in the country. Earlier, taxes varied from state to state, city to city and even local bodies. GST harms producer states and rewards consumer states in terms of revenues. States like Tamil Nadu, which have invested highly in their manufacturing ecosystem, are facing new problems.

Statement 3 is incorrect: State governments have lost most of their independent taxation powers and has become more dependent on the Centre for revenues due to GST.

Source: The Indian Express