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CA Intermediate · Taxation · GST in India - An Introduction

Which of the following is a feature of GST as a destination-based consumption tax in India?

In a destination-based consumption tax, the revenue accrues to the State or place where the goods or services are finally consumed, not where they are produced. GST is a multi-stage tax with input tax credit, so it is not charged only at manufacture or only at the final sale.

  1. ATax revenue accrues to the State where the goods are manufactured
  2. BTax revenue on a supply accrues to the State or place where the goods or services are finally consumedCorrect
  3. CGST is levied only at the stage of manufacture
  4. DGST is levied only on the final sale to the consumer, with no tax at earlier stages

Explanation

GST is a destination-based tax, so revenue goes to the place of consumption rather than origin. It is a multi-stage tax levied at each stage of supply with credit for tax paid on inputs. Hence levying only at manufacture or only at final sale is incorrect.

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