Value Added Tax and Goods and Service Tax I Cascading Effect of Taxes

A value-added tax (VAT or goods and services tax (GST), general consumption tax (GCT)) is a consumption tax that is levied on the value added at each stage of a product's production and distribution. VAT is similar to, and is often compared with, a sales tax

What is Goods and Services Tax (GST)?
The Goods and Services Tax is a form of Indirect Tax levied on most of the goods and services sold in India for domestic consumption.
It is based on the principle of Value Added Tax (VAT) and is applicable throughout India.
It is paid by consumers, but it is remitted to the government by the businesses selling the goods and services.
It has subsumed and replaced various indirect taxes that were previously levied by the central and state governments.

History and Evolution of GST in India
In 2003, the Kelkar Task Force on Indirect Tax mentioned a comprehensive Goods and Services Tax, which is based on the principle of Value Added Tax (VAT).
Budget Speech for the financial year 2006-07 made a proposal to introduce a National-level Goods and Services Tax by 1st April 2010.
With an intention to do away with multiple indirect taxes and to have a ‘One Nation One Tax’ system, the Constitution (122nd Amendment) Bill was introduced in 2014.
The Constitution (122nd Amendment) Bill was passed as the Constitution (101st Amendment) Act in 2016.
Finally, the Goods and Services Tax was introduced and enforced across the country on 1st July 2017.

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