GST is a destination-based tax on the consumption of goods and services. It is to be levied at all stages, i.e., from manufacturing up to final consumption with credit of taxes paid at earlier stages available as a setoff.
GST will absorb several indirect taxes like service tax, Value Added Tax (VAT), entertainment tax, luxury tax and Excise duty. These indirect taxes will be replaced by three major taxes - Central GST (CGST), State GST (SGST) and Integrated GST (IGST).