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CA Intermediate · Taxation · GST in India - An Introduction

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

GST is a destination-based consumption tax, so IGST revenue on inter-State supplies is ultimately apportioned to the State of consumption, not the State of manufacture. It is a multi-stage tax with input credit, and basic customs duty still applies on imports.

  1. AGST on inter-State supply accrues to the State where the goods are manufactured
  2. BGST is a consumption-based tax, and the revenue of IGST is ultimately apportioned to the State of consumptionCorrect
  3. CGST replaced customs duty on imports into India entirely
  4. DGST is levied only at the final retail stage without credit of tax paid earlier

Explanation

GST is a destination or consumption-based tax; IGST revenue is settled to the State where goods or services are consumed. Customs duty continues on imports alongside IGST. GST is a multi-stage tax with input tax credit, not a single-point tax. Hence only the consumption statement is correct.

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