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CS Executive · Tax Laws and Practice · Concept of Indirect Taxes at a Glance

Which of the following is a feature of GST that reflects its nature as an indirect tax levied on consumption?

GST is a destination-based tax on the supply of goods or services. It is collected by suppliers at each stage, with credit for tax paid on inputs, and the burden finally rests on the consumer, which makes it an indirect tax.

  1. AIt is a destination-based tax on supply of goods or services, with tax ultimately borne by the consumerCorrect
  2. BIt is levied on the total income of a person for a tax year
  3. CIt is levied on the net wealth of the supplier
  4. DIt is payable only by the consumer directly to the government

Explanation

GST is a destination-based consumption tax on supplies, collected through the supply chain with the burden on the final consumer. Option B describes income tax, and option D is wrong because suppliers collect and deposit the tax.

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