Goods and Services Tax (GST) is an indirect tax introduced in India in 2017 that is imposed on the supply of goods and services, and it subsumes all indirect taxes except a few. It is a destination-based tax imposed on goods and services used, and it is not imposed at the point of origin from where goods come. GST also has a few components specific to state governments, central government, and Union Territories (UT).
Which one of the following statements can be inferred from the given passage?
A. GST is imposed on the production of goods and services.
B. GST includes all indirect taxes.
C. GST does not have a component specific to UT.
D. GST is imposed at the point of usage of goods and services.
GATE 2020 · General Aptitude · Verbal Reasoning · medium
Answer: Option D is correct. The passage explicitly states GST is a destination-based tax on goods and services used, which means it is imposed at the point of usage (consumption), not at the point of origin.
Evaluate option A: The passage says GST is 'imposed on the supply of goods and services', not production. Supply and production are different stages. Option A incorrectly states production.
Evaluate option B: The passage explicitly states GST 'subsumes all indirect taxes except a few', meaning some indirect taxes are excluded. Option B claims it includes ALL indirect taxes, which contradicts the passage.
Evaluate option C: The passage states GST 'has a few components specific to state governments, central government, and Union Territories (UT)'. This means UT does have a specific GST component. Option C claims UT has no specific component, which is false.
Evaluate option D: The passage says GST is 'a destination-based tax imposed on goods and services used'. 'Used' = point of usage, and 'destination-based' confirms it is at the consumer's location, not origin. Option D accurately paraphrases this.