Goods and Services Tax (GST) is a comprehensive *indirect tax* levied on the supply of goods and services in a country. It is designed to replace multiple existing taxes like *sales tax, **value-added tax (VAT), **excise duty, and **service tax*, streamlining the tax structure². Here are some key points about GST:

1. Definition:

– GST is a *value-added tax* that applies to most goods and services sold for *domestic consumption*.
– It is included in the final price and paid by consumers at the point of sale, then passed to the government by the seller.
– The tax is usually *taxed as a single rate* across a nation¹.

2. Purpose and Structure:

– GST aims to simplify the tax system by unifying various indirect taxes into a single tax.
– It covers both goods and services, ensuring a *comprehensive* approach.
– The tax is *multistage* and *destination-based*, meaning it is levied at each stage of production or distribution and collected where the goods or services are consumed.
– Unlike earlier taxes, GST is applicable throughout the supply chain, from the manufacturer to the consumer.

3. Advantages:

– *Simplification*: Replacing multiple taxes with GST streamlines compliance and reduces administrative burden.
– *Uniformity*: A single tax system promotes consistency across the country.
– *Increased Revenue*: By broadening the tax base, GST can lead to higher revenue collection.
– *Reduced Tax Evasion*: Improved transparency and tracking help curb tax evasion.

4. Disadvantages:

– *Initial Challenges*: Transitioning to GST can be complex and disruptive.
– *Rate Complexity*: Determining the appropriate tax rate for different goods and services can be challenging.
– *Compliance Burden*: Businesses need to adapt to new filing requirements and procedures.

5. Global Context:

– Many countries have adopted GST or similar systems, each with its own variations.
– India introduced GST in 2017 as part of its “one nation, one tax” reform, replacing multiple indirect taxes³.
– Other countries also use GST or VAT (Value-Added Tax) systems, which share similarities but may differ in rates, exemptions, and registration requirements.