With reference to GST, which of the following statements are true? 1. GST is based on a system of concurrency of indirect taxes, where every transaction attracts central as well as state GST 2. GST replaced a production-based taxation system by a consumption-based tax system 3. It brings destination principle for cross-border trading for which the poorer and consuming states are benefiting at the expense of more affluent and industrialized ones

Explanation

Statement 1 is correct: The Goods and Services Tax (GST) is based on the system of concurrency of indirect taxes. GST is a comprehensive indirect tax that subsumes a range of central and state taxes. It was introduced in India to create a unified and concurrent system of taxation, replacing various taxes like excise duty, service tax, value-added tax (VAT), and others. Statement 2 is correct: The Goods and Services Tax (GST) is designed to shift the tax system from production-based to consumption-based. Under the GST system, taxes are levied at each stage of the supply chain, and they are ultimately borne by the end consumer. This transition from a production-based system to a consumption-based system aims to make taxation more equitable and reduce the cascading effect of taxes Statement 3 is correct: In the pre-GST era, manufacturing states often benefited more from taxes, and consuming states received less. The introduction of GST sought to balance this by ensuring that states where goods and services are consumed receive a fair share of tax revenue. This has generally been seen as a way to benefit less industrialised or economically weaker states, helping them with additional revenue for development and welfare programs. Meanwhile, industrialised states may see a decrease in tax revenue under this system