Q.What is Goods and Services Tax (GST)? State the date from which it came into effect in India and the Constitutional Amendment that enabled it.

GST is defined by two features together — being levied at every stage of supply, yet ultimately borne only once by the final consumer.

Input tax credit is what keeps a multi-stage tax from cascading.

GST is a comprehensive, multi-stage, destination-based indirect tax levied on the supply of goods and services. It is charged at every stage of the supply chain — production, wholesale, retail — but the input tax credit mechanism ensures that tax paid at an earlier stage is set off against tax payable at the next, so the tax never cascades and its final economic burden is borne only once, by the end consumer. It is 'destination-based' because the tax revenue belongs to the State where the goods/services are actually consumed, not the State where they were produced.

GST was introduced in India through the Constitution (One Hundred and First Amendment) Act, 2016, which gave Parliament and every State Legislature concurrent power to legislate on the supply of goods and services, and established the GST Council under the new Article 279A. GST itself was rolled out across the country with effect from 1 July 2017, under the slogan 'One Nation, One Tax, One Market.'

Students sometimes confuse the date the Constitutional Amendment was PASSED (2016) with the date GST actually CAME INTO EFFECT (1 July 2017) — the Amendment created the legal power to levy GST; the tax itself started being levied about a year later.