GST is a/an

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UPSC CAPF Paper - I: Official Paper (Held on: 7 Aug 2022)
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  1. destination-based consumption tax
  2. origin-based production tax
  3. destination-based sales tax on transaction
  4. origin-based tax on sales transaction

Answer (Detailed Solution Below)

Option 1 : destination-based consumption tax
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Detailed Solution

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The correct answer is option 1.

Key Points

  • Goods and Services Tax is an indirect tax used in India on the supply of goods and services.
  • It is a value-added tax levied on most goods and services sold for domestic consumption.
  • It was launched in India on 1 July 2017 as a  comprehensive indirect tax for the entire country.
  • It is a comprehensive, multistage, destination-based tax comprehensive because it has subsumed almost all the indirect taxes except a few state taxes. Hence option 1 is correct.
  • It is paid by the consumers and is remitted to the government by the businesses selling the goods and services.

Additional Information

It is of three types i.e. 

  • CGST to be levied by the Centre, 
  • SGST to be levied by the States and 
  • IGST is a tax levied on all Inter-State supplies of goods and/or services.  
  • All these taxes are levied at rates mutually agreed upon by the Centre and the States. 
  • The GST Council headed by the Union Finance Minister is the governing and key decision-making body for GST. 
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