GST : One Nation, One Tax, One Market

Goods and Service Tax (GST) is the single comprehensive indirect tax, operational from 1 July 2017, on supply of goods and services, right from the manufacturer/service provider to the consumer. It is a destination based consumption tax with facility of Input Tax Credit in the supply chain. It is applicable throughout the country with one rate for one type of goods/service. It has amalgamated a large number of Central and State taxes and cesses. It has replaced large number of taxes on goods and services levied on production/sale of goods or provision of service.

As there have been a number of intermediate goods/services, which were manufactured/ provided in the economy, the pre GST tax regime imposed taxes not on the value added at each stage but on the total value of the commodity/service with minimal facility of utilisation of Input Tax Credit (ITC).

Five petroleum products have been kept out of GST for the time being but with passage of time, they will get subsumed in GST. State Governments will continue to levy VAT on alcoholic liquor for human consumption. Tobacco and tobacco products will attract both GST and Central Excise Duty. Under GST, there are 6 (six) standard rates applied i.e. 0%, 3%, 5%, 12%, 18% and 28% on supply of all goods and/or services across the country.

One of the main and significant features of GST :

One rate for one type of goods/service

The correct answer is option (2) : One rate for one type of goods/service

In the Goods and Services Tax (GST) system, there is a uniform tax rate applied to a specific type of goods or service across the entire country. This aligns with the principle of having a simplified and standardized taxation structure, contributing to the idea of "One Nation, One Tax, One Market."