Question

GST is a _________ -based indirect tax on consumption of goods and services.

• A. Development
• B. Dividend
• C. Destiny
• D. Destination

Hint:

GST is collected where goods or services are finally consumed. Think of the place the consumer is located.

Answer 1

The Correct Option is D

Step 1: Understanding the Concept:
GST stands for Goods and Services Tax. It is an indirect tax, so the seller collects it from the buyer and pays it to the government.

Step 2: Key Idea:
The words "based" and "consumption" in the question are the clue. A consumption tax should be collected where the goods or services are finally used.

Step 3: Apply the Idea:
The place where goods or services are consumed is called the place of destination. GST follows this rule, so it is a destination-based tax.
The tax revenue goes to the State where the final consumer is located, not to the State where the goods were made.

Step 4: Why the other options are wrong.
Development-based: no tax is linked to development in this way.
Dividend-based: a dividend is a share of profit paid to shareholders, so it has nothing to do with GST.
Destiny-based: this is not a tax term at all.

Final Answer:
GST is a destination-based indirect tax on consumption. This is option (D), Destination.