Direction: Each question given below consists of a statement, followed by three or four arguments numbered I, II, III and IV. You have to decide which of the argument is/are 'strong' argument(s) and which is/are 'weak' argument(s) and accordingly choose your answer from the alternatives given below each question.
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Statement:
Should all the indirect taxes in India can 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 is turn will boost tax collection.
III. No. other country has adopted such system.
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- None is strong
- only I and III are strong
- Only II is strong
- only II and III are strong
- None of these
Correct Option: E
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.
