Exams › IBPS PO › Reasoning

Statements: Should all 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. Manufacturers and traders will be benefited by this, which in turn will boost tax collection. III. No. No other country has adopted such a system.

1. None is strong
2. Only I and III are strong
3. Only II is strong
4. Only II and III are strong

Correct answer: Only I and III are strong

Solution

Argument I is strong because it gives a direct, practical advantage: simpler collection and lower cost. Argument III is also strong in this context because it raises a policy-level objection based on precedent, which can be relevant in evaluating feasibility. Argument II is weak because it is too indirect and assumes benefits without clearly linking them to the proposal.

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