What is/are the most likely advantages of implementing 'Goods and Services Tax (GST)'? 1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India. 2. It will drastically reduce the 'Current Account Deficit' of India and will enable it to increase its foreign exchange reserves. 3. It will enormously increase the growth and size of the economy of India and will enable it to overtake China in the near future. Select the correct answer using the codes given below:

The correct answer is A. Only statement 1 is a likely advantage.

Core concept: GST is a comprehensive, destination-based indirect tax that subsumes central taxes such as excise duty, service tax and CST, and state taxes such as VAT, entry tax and most local levies. The 101st Constitutional Amendment (2016) created it, and the GST Council (Article 279A) governs it jointly with the Centre and states. Its main promise is one common national market, with fewer check posts and no cascading tax.

• Statement 1 is correct. Multiple taxes and multiple collecting authorities are replaced by one framework, which removes interstate barriers and unifies the market.
• Statement 2 is wrong. GST affects tax collection and compliance. The current account deficit depends on the trade balance, invisibles and capital flows, and forex reserves depend on external flows. A domestic tax reform does not drastically reduce either directly.
• Statement 3 is wrong. GST can improve efficiency and formalisation, but no tax reform can be expected to enormously raise growth or let India overtake China. That is exaggerated, and the question's "most likely" wording rules it out.

Mains angle: GST is a case study in cooperative federalism and in the trade-off between state revenue autonomy and a common national market.

Trap: Many students pick D because all three sound like reform benefits. Statement 2 wrongly links a domestic tax to external balance, and statement 3 uses hype. Treat "most likely" as a filter for realistic claims.