GST is a/an

GST is a/an

destination-based consumption tax
origin-based production tax
destination-based sales tax on transaction
origin-based tax on sales transaction
This question was previously asked in
UPSC CAPF – 2022
The correct answer is A) destination-based consumption tax.
– Goods and Services Tax (GST) is levied at the point of consumption. This means the tax accrues to the consuming state rather than the producing state.
– It is a tax on the consumption of goods and services. It is applied to the value addition at each stage of the supply chain, but the burden is ultimately borne by the final consumer.
– Before GST, India had a complex indirect tax structure with taxes levied at various points by both central and state governments (like excise duty, service tax, VAT, etc.). GST aimed to subsume most of these taxes into a single, unified tax.
– The destination-based nature of GST differs from origin-based taxes (like manufacturing excise duty), where the tax is levied at the point of production.