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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, as understood at the Intermediate level?

GST is a destination-based consumption tax, meaning revenue accrues to the State where the goods or services are finally consumed rather than where they are produced. It is charged on value addition at each stage with input tax credit, avoiding cascading of taxes.

  1. ATax is collected at the place where goods are manufactured, regardless of where they are consumed
  2. BTax revenue accrues to the State where the goods or services are finally consumedCorrect
  3. CTax is levied only at the final retail stage with no credit at earlier stages
  4. DTax is levied on every stage of supply on the full value without any credit of tax paid on inputs

Explanation

In a destination-based tax, revenue goes to the State where consumption occurs. Option A describes an origin-based tax. Options C and D are wrong because GST is levied on value addition at each stage with input tax credit, so there is no cascading.

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