**Question-Related to GST?**
Verified**Explanation:**
GST stands for Goods and Services Tax, which is classified as an indirect tax. An indirect tax is one that is imposed on goods and services rather than on income or profits, and the tax burden can be shifted from one person to another.
GST is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. It was introduced in India on July 1, 2017, replacing multiple indirect taxes like VAT, service tax, excise duty, and others. The tax is collected at each stage of the supply chain, but the final burden falls on the consumer who purchases the goods or services.
The key characteristics that make GST an indirect tax include:
• Tax on consumption: GST is levied on the consumption of goods and services, not on income or wealth
• Tax shifting: The tax burden can be passed on from the seller to the buyer through higher prices
• Collected at point of sale: GST is collected when goods are sold or services are provided
• Broad-based coverage: It applies to a wide range of goods and services across the economy
GST in India operates under a dual structure with Central GST (CGST) collected by the central government and State GST (SGST) collected by state governments for intra-state transactions. For inter-state transactions, Integrated GST (IGST) is levied. This system ensures that the tax revenue is shared appropriately between the center and states while maintaining the indirect nature of the tax.
