GST, an indirect tax reform, is a value added tax applicable to both goods and services. It is essentially a tax only on value addition at each stage, permitting a supplier at each stage to set-off, through a tax credit mechanism. The final consumer will bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages. It subsumes several taxes that exist at the Union and State levels such as VAT, Central Excise Duty, Entry Tax, Octroi duty, Purchase Tax, Entertainment Tax, State cesses and surcharges, etc. There will be one indirect tax in place of many taxes and there will be two or three slabs (rates) in place of multiple rates. The tax is imposed not on the origin but on the basis of the destination. I
t makes the country a single market.
