GS I›E-2.2.3›Tax system — direct vs indirect; GST structure

Tax system — direct vs indirect; GST structure

E-2.2.3Core
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Exam Strategy

UPSC tests the distinction between direct and indirect taxes, GST rate structure (5%, 12%, 18%, 28%), and which goods fall under each slab with regularity. Examiners focus on GST's dual structure (CGST+SGST), exemptions, and recent rate changes. Common error: confusing GST slabs or misidentifying whether an item is taxable.

High-yield hooks
1

Direct tax = burden cannot shift; Indirect tax = burden shifts forward

2

GST four slabs: 5%, 12%, 18%, 28% (essentials to luxury)

3

CGST+SGST = dual structure; Centre + State collect separately

4

Exemptions: food grains, essential medicines, educational services

5

ITC (Input Tax Credit) prevents tax-on-tax cascading

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SCANECONOMY/FISCAL-POLICYECONOMY/TAXATIONECONOMY/GST