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CA Intermediate · Taxation · GST in India - An Introduction

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

GST is destination-based, meaning the tax is collected where goods or services are consumed and the revenue goes to the consuming State. It is not origin-based, not limited to manufacture, and it avoids cascading through input tax credit across the supply chain.

  1. ATax revenue on an inter-State supply accrues wholly to the State where the goods are manufactured
  2. BTax is collected at the point of consumption, so the revenue goes to the State where the goods or services are finally consumedCorrect
  3. CTax is levied only at the stage of manufacture of goods
  4. DTax is levied on the cascading value including tax paid at earlier stages without any credit

Explanation

GST is a destination-based tax, so revenue belongs to the State of consumption. It is levied on supply at every stage with input tax credit, which removes cascading, so options C and D are wrong. Option A describes an origin-based tax.

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