Question : What is destination based consumption tax?
Answer: When a supply originates in one State and is consumed in another State, tax can accrue to either of the two States.
In a destination based consumption tax, taxes accrue to the State where the supply is consumed.
In origin based tax, the tax accrues to the State where the supply originates.
GST is basically a destination based consumption tax. For example, if a car is manufactured in Chennai but is purchased eventually by a consumer in Mumbai, SGST (or the State component in IGST) would accrue to Maharashtra and not to Tamil Nadu.
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