Definition
Goods and Services Tax.
Comprehensive indirect tax levied on supply of goods and services.
Statutory Definition
Central Goods and Services Tax Act, 2017.
Etymology & Origin
Introduced in India on July 1, 2017, through the 101st Constitutional Amendment, replacing a complex web of central and state indirect taxes with a unified national market concept.
Full Legal Analysis
The Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based indirect tax levied on every value addition across the supply chain in India. It replaced multiple cascading taxes levied by the central and state governments, such as Excise Duty, VAT, and Service Tax.
GST operates on a dual model: Central GST (CGST) and State GST (SGST) are levied simultaneously on intra-state supplies, while Integrated GST (IGST) is levied on inter-state supplies.
A fundamental feature of GST is the seamless flow of Input Tax Credit (ITC), which ensures that tax is only paid on the value added at each stage, eliminating the cascading effect (tax on tax).
The Supreme Court held that the recommendations of the GST Council are not binding on the Union and States, but have a persuasive value, emphasizing the cooperative federalism underlying the GST framework.
Advocates must remember that GST is destination-based; the tax revenue accrues to the state where the goods or services are finally consumed, making 'Place of Supply' rules the most litigated aspect of the law.
This Term in Indian Statutes
Central Goods and Services Tax Act, 2017, 2017
"Levy and collection of Central Goods and Services Tax."
The charging section that imposes the tax on intra-state supply.
