Enumerate the indirect taxes which have been subsumed in the Goods and Services Tax (GST) in India. Also, comment on the revenue implications of the GST introduced in India since July 2017.
Approach · directive: “enumerate / comment”
What it asks · List the central and state indirect taxes that GST replaced, then comment on what the tax has meant for revenue of the Centre and the States since July 2017.
The question has 2 parts — answer each
- Enumerate the central and state indirect taxes subsumed in GST
- Comment on the revenue implications of GST since July 2017, for the Centre and the States
Open with · GST, in force from 1 July 2017, replaced many central and state indirect taxes with one destination-based tax on the supply of goods and services.
Cover
- Central taxes subsumed: central excise duty, additional excise duties, service tax, additional customs duty (CVD), special additional duty (SAD), and related surcharges and cesses.
- State taxes subsumed: VAT, central sales tax, luxury tax, entry tax (all forms), entertainment tax, purchase tax, taxes on advertisements, lotteries, betting and gambling.
- Kept outside: basic customs duty, alcohol for human consumption, stamp and electricity duties; petroleum products were kept out at the start.
- Revenue gains: a wider taxpayer base, input tax credit and e-way bills improved compliance, so collections rose over time, though early monthly figures were uneven.
- Concerns: repeated rate cuts and exemptions lowered the average effective rate below what the design assumed, and the 2019 slowdown weakened collections.
- States: compensation for five years, at 14 per cent yearly growth over 2015-16 revenue, funded by a cess, protected their finances; delays caused strain.
Close with · GST has widened the base and unified the market, but steady revenue needs fewer rate slabs, better compliance and a settled arrangement with the States.
Add value (verified)
- CBIC's own list of the state taxes subsumed under GST can be used to check that an enumeration is complete; the same page lists the central taxes. Know About GST, Central Board of Indirect Taxes and Customs (cbic-gst.gov.in) ↗“State taxes that would be subsumed under the GST are: State VAT Central Sales Tax Luxury Tax Entry Tax (all forms) Entertainment and Amusement Tax (except when levied by the local bodies) Taxes on advertisements Purchase Tax”
Question: UPSC's CS (Main) 2019, GS Paper III — paper ↗. Approach: Minimalist IAS, checked 30 Sept 2026 (how we verify) — UPSC publishes no model answers. ·
Model answer · 230 words (UPSC limit 150) · Minimalist IAS
GST, in force from 1 July 2017, replaced many central and state levies with one destination-based tax on the supply of goods and services.
Taxes subsumed
- Central: central excise duty and additional excise duties, service tax, additional customs duty (CVD), special additional duty (SAD), and central surcharges and cesses on goods and services.
- State: VAT, central sales tax, purchase tax, luxury tax, entry tax in all forms, entertainment tax (except where levied by local bodies), taxes on advertisements, lotteries, betting and gambling, and state cesses and surcharges.
- Still outside: basic customs duty, alcohol for human consumption, stamp and electricity duties; petroleum products stay out until the GST Council decides.
Revenue implications
- Wider net: registration, input-tax credit chains and e-way bills widened the base and improved compliance, so collections rose over time despite uneven monthly receipts in the first two years.
- Rate erosion: repeated rate cuts and exemptions pulled the effective rate below the design assumption, and the 2019 slowdown weakened collections further.
- States: a guaranteed 14 per cent yearly growth over 2015-16 revenue for five years, funded by a compensation cess, protected state budgets, but delayed payments strained Centre-State trust.
- Autonomy: a shared base means neither level can change rates alone, narrowing the States' fiscal room.
GST has unified the market and widened the base; steady revenue now needs fewer slabs, tighter compliance and a settled arrangement with the States.
Written by Minimalist IAS from facts checked at source (how we verify) — a little fuller than exam length, so every part of the question is covered; in the hall, keep the structure and trim the detail. UPSC publishes no model answers: compare your structure and coverage with this, then write your own.