Destination based tax
When we refer to GST (Goods and Services Tax) as a destination-based tax. It implies that the tax is imposed at the final point of consumption for goods or services. The tax proceeds collecte by the state where the goods or services consumed, rather than the state where they produced.
For more information, visit this site: https://www.gst.gov.in/
For instance, if a manufacturer in Gujarat sells goods to a retailer in Maharashtra, the GST levied on the transaction will receive by Maharashtra, the state where the goods consumed, instead of Gujarat, the state where the goods originated. This ensures that the state where the goods or services consume receives the tax revenue, promoting an equitable distribution of tax earnings among the states.
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