Indian Taxation System & Goods and Services Tax (GST)
India's taxation architecture is bifurcated into direct taxes (levied on income and corporate profits) and indirect taxes (levied on goods and services). Direct taxes, including Personal Income Tax and Corporate Tax, are progressive in nature and administered by the Central Board of Direct Taxes (CBDT). The Goods and Services Tax (GST), implemented on July 1, 2017, via the 101st Constitutional Amendment Act, unified a fragmented regime of cascading indirect levies (excise duty, service tax, VAT) into a single destination-based consumption tax. Operating under a dual framework—comprising CGST, SGST/UTGST, and IGST for inter-state transactions—rates and dispute resolutions are governed collegially by the constitutional GST Council (Article 279A).
Key Concepts & Examination Highlights
- The 101st Constitutional Amendment Act 2016 paved the way for the nationwide rollout of the Goods and Services Tax on July 1, 2017.
- The GST Council is constituted under Article 279A of the Constitution and is chaired by the Union Finance Minister.
- GST is a destination-based consumption tax where revenue accrues to the state where the goods or services are finally consumed.
- Direct taxes in India are administered by the Central Board of Direct Taxes (CBDT), while indirect taxes fall under CBIC.