GST is a broad, multi-level, destination-based Tax, Which will be applied indirectly on each value added.
Any object passes through many steps from construction to final consumption. The first step is to buy raw materials. The second stage is produced or produced. Then, there is a provision for storing goods or putting them in the warehouse. After this, the product comes to the retailer or retailer. And in the last step, the retailer sells the final goods to you or to the final consumer. GST will be imposed in these stages, and this will be a multi-level tax.
Same as multi-level tax, promotion cost of each stage will be applied.
Destination-based: GST will be levied on all transactions occurring during the entire manufacturing chain. Earlier, when a product was manufactured, the center used excise duty on manufacturing or excise duty. In the next step, when the item is sold, the state adds the VAT. Then there will be a VAT at the next level of sale. Now, GST will be levied at every level of sale.
Let’s assume that the entire manufacturing process is happening in Rajasthan and the final sale in Karnataka is going on. Since GST is imposed at the time of consumption, the Rajasthan state will get revenues in the production and warehousing stages. But when the product goes out of Rajasthan and reaches the final consumer in Karnataka, then Rajasthan will not get revenue. This means that Karnataka will earn revenues on final sale as it is the destination-based tax. This means that Karnataka will earn revenues on final sales as it is destination-based tax and this revenue will be collected at the last destination of sale, which is Karnataka.