The various Central, State and Local levies were examined to identify their possibility of being subsumed
under GST. While identifying, the following principles were kept in mind:
- Taxes or levies to be subsumed should be primarily in
the nature of indirect taxes, either on the supply of goods
or on the supply of services.
- Taxes or levies to be subsumed should be part of
the transaction chain which commences with import/
manufacture/ production of goods or provision of services
at one end and the consumption of goods and services at
- The subsumation should result in free flow of tax
credit in intra and inter-State levels. The taxes, levies and
fees that are not specifically related to supply of goods &
services should not be subsumed under GST
- Revenue fairness for both the Union and the States
individually would need to be attempted.