Goods and Services Tax likely to be levied in India is not a

The Goods and Services Tax (GST) in India is defined as a comprehensive, multi-stage, value-added tax [4]. It is specifically characterized as a destination-based consumption tax, meaning the tax revenue is collected by the state where the goods or services are ultimately consumed rather than where they were produced [2]. GST operates on the principle of value addition, where tax is levied only on the incremental value at each stage of the supply chain, facilitated by the Input Tax Credit (ITC) mechanism to prevent cascading effects [4]. Conversely, a 'gross value tax' would imply a tax on the total value of a product at every stage without deductions for taxes paid on inputs, which contradicts the fundamental design of GST as a value-added system [4]. Therefore, GST is not a gross value tax.

Sources

1. [3] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > Goods and Services Tax (GST): > p. 174
2. [4] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > Box 5.3: GST: One Nation, One Tax, One Market > p. 83
3. [1] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > Box 5.3: GST: One Nation, One Tax, One Market > p. 82
4. [2] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > Details about GST > p. 91