Directions : Following question consists of a statement followed by three arguments I, II and III . You have to decide which of the arguments is a STRONG arguments and which is a WEAK Argument. Statement : 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.

The correct answer is: Only I is strong.

Argument I is strong because it provides a clear and specific reason why combining all indirect taxes into a single tax on all commodities would be beneficial. Argument II is weak because it is based on the assumption that manufacturers and traders will be benefited by such a change, but this assumption is not supported by any evidence. Argument III is also weak because it is based on the appeal to tradition, which is not a valid argument.

Here are some additional details about each argument:

• Argument I: This argument is strong because it provides a clear and specific reason why combining all indirect taxes into a single tax on all commodities would be beneficial. The argument states that this will considerably simplify the tax collection mechanism and the cost of collecting tax will also reduce. This is a valid reason to support the proposal, as it would make the tax system more efficient and less costly to administer.
• Argument II: This argument is weak because it is based on the assumption that manufacturers and traders will be benefited by such a change. However, this assumption is not supported by any evidence. In fact, it is possible that manufacturers and traders could be harmed by such a change, if it leads to higher taxes or increased compliance costs.
• Argument III: This argument is also weak because it is based on the appeal to tradition, which is not a valid argument. Just because no other country has adopted such a system does not mean that it is not a good idea. In fact, there are many countries that have adopted single-rate value-added taxes, which are a type of indirect tax. These taxes have been shown to be effective in raising revenue and simplifying the tax system.

In conclusion, only Argument I is strong. Arguments II and III are weak.