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GST: One Nation, One Tax — The Story
Before 2017 a packet of biscuits travelled through a maze of taxes: excise duty at the factory, VAT or sales tax in each state, entry tax at the border, and octroi at the city gate. Each tax was charged on top of the last, so tax piled on tax, and trucks waited at check-posts.
The Goods and Services Tax (GST) replaced this maze with one indirect tax on the supply of goods and services. It was introduced by the 101st Constitutional Amendment Act, 2016 and launched at a midnight session of Parliament on 30 June–1 July 2017, so 1 July is observed as GST Day.
GST is a destination-based consumption tax: the revenue goes mainly to the state where the goods are consumed, not where they are made. It is charged at every stage but credit is given for tax already paid, so only the value added at each stage is taxed. This case-study short follows the tax from its structure to its rates.
1. GST was introduced in India through which Constitutional Amendment Act?
2. Which Article of the Constitution provides for the GST Council?
3. A trader sells goods worth ₹2000 within the same state at 18% GST. How much SGST goes to the state?
4. In the GST Council, what is the weightage of the Centre's vote?
5. Which of the following has been kept outside the GST regime?
6. A trader in Bihar sells goods to a buyer in Kerala. Which GST is levied on this sale?
7. A shop collects ₹270 GST on its sales and had paid ₹216 GST on its purchases. How much must it deposit with the government?
8. Which statement about GST is correct?