GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into effect on 1st July 2017; Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.
In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. This law has replaced many indirect tax laws that previously existed in India.
Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. Inter-state sales are chargeable to Integrated GST.
The definition of Goods and Service Tax
“GST is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.”
There are multiple change-of-hands an item goes through along its supply chain: from manufacture to final sale to the consumer.
Consider goods manufactured in Tamil Nadu and are sold to the final consumer in Kerala. Since Goods & Service Tax is levied at the point of consumption. So, the entire tax revenue will go to Kerala and not Tamil Nadu.
The manufacturer who makes biscuits buys flour, sugar and other material. The value of the inputs increases when the sugar and flour are mixed and baked into biscuits.
GST MCQ for CA Final
Basics of GST
Place of Supply of GST