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Refer to the given… (Class 12 Economics SQP 2026-27, Q12)

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EconomicsCBSE Class 12 · Sample paper, session 2026-27 · 3 marks · Short answer

CBSE Class 12 Economics sample paper 2026-27: question 12

From the official CBSE sample question paper for 2026-27, section A, question 12, for 3 marks. Try it first; the hints and our step-by-step solution are below.

Q12 · 3 marks · Short answerCompetency-basedGovernment Budget and the Economy

Refer to the given cartoon strip carefully:
Analyse the impact of introduction of Goods and Service Tax in improving the efficiency of the taxation system and benefitting the overall economy.

Figure in the paper: Two-panel cartoon. Left panel 'Before GST...': a boy asks 'Why does the same toy cost differently in different states?' with toy prices ₹200 and ₹250; a girl says 'As India has multiple indirect taxes like VAT, Excise, Service Tax etc.' Right panel 'GST: One Nation, One Tax!': boy says 'That's why the government introduced GST – One Nation, One Tax.' with a map of India labelled GST and trucks; another says 'So GST replaced many taxes and made prices more transparent.' See it in the official paper.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2026-27.

Hints

Open one hint at a time and try again before the next.

Hint 1

Why did the same toy cost different amounts in different states before GST?

Hint 2

What is a cascading effect of taxes?

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. The cartoon contrasts the time before GST, when a toy cost different amounts in different states because of many indirect taxes (VAT, excise, service tax), with "One Nation, One Tax". GST simplified the tax structure by subsuming these indirect taxes into one tax across the country.

    1 mark

  2. It removed the cascading (tax-on-tax) effect, reducing the cost of doing business and the burden on consumers; lower costs of production made Indian goods and services more competitive in domestic and international markets.

    1 mark

  3. It made the tax system more transparent and uniform across states, improving compliance and the ease of doing business, which benefits the overall economy.

    1 mark

Answer: GST replaced many indirect taxes with one tax, removed cascading, cut costs, increased competitiveness and made taxation more transparent, benefiting the economy.

Where the marks are

  • Impact of GST on efficiency of taxation and on the economy (marked as a whole, 3)

Revise the chapter

Practise this chapterBoard-style questions from Government Budget and the Economy, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2026-27: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.