Skip to content

CA Intermediate · Taxation · GST in India - An Introduction

Which of the following statements about the destination-based nature of GST is correct?

The correct statement is that tax revenue accrues to the State where goods or services are consumed. GST is a destination-based consumption tax, so the consuming State receives the revenue rather than the State of manufacture or origin, and credit chains allow tax at each stage.

  1. ATax revenue accrues to the State where the goods are manufactured
  2. BTax revenue accrues to the State where the goods or services are consumedCorrect
  3. CTax is levied at the point of origin of supply, and the consuming State gets no share
  4. DTax is levied only at the final retail stage in the consuming State

Explanation

GST is a consumption-based (destination-based) tax, so revenue goes to the State of consumption. It is not origin-based, and it is levied at every stage of supply with input tax credit, not only at the retail stage. Hence only B is correct.

Did you get it right without looking?

One question tells you little. A timed set on GST in India - An Introduction shows your real accuracy, how long you take and where you lose marks.

Practise GST in India - An IntroductionFree diagnostic mock

More GST in India - An Introduction questions