(1) Destination based tax on consumption:
GST is a destination-based tax on the consumption of goods / or services. It is levied at all stages right from manufacturers/inception up to final consumption with a credit of taxes paid at previous stages available as set off i.e input tax credit (ITC) of the Taxes paid. It means only values addition will be taxed and the burden of tax is to be borne by the final consumers.
(2) Tax on Consumption of Services:
It is tax on goods and /or services.
E.g (1) M/s A & Co. sells goods to B. There is a tax on Goods.
E.g (2) CA Mr. Z gives services to his client, there is a tax on services.
E.G (3) Navneet Motors services Honda Car of Mr. Desai. They changed the oil, some parts its goods, they wash the car, It is services; both goods, as well as services, will attract GST.
(3) Wider base unlike Direct Tax:
Indirect taxes have a wide base. In India, about 5 to 6 crores out of 125 crores people pay Income Tax while GST on tea is collected from more than 80 crores people.
(4) An Important Sources of Resources:
It Is levied on most of the commodities and services. This gives the government huge revenue which is more than 60% of State and Central Government Revenue. It is estimated that the collection of Gst in the month of March 2019 is about rupees one lakh crores.
(5) Promote Social welfare:
Government can levy or charge a high rate of harmful goods knowns as SIN Goods like tobacco products.
(6)Regressive in nature:
In the case of GST, the rate of tax is the same for both rich or poor. Tax nature is also the same while Income Tax is Progressive. Poor are not liable to pay tax