Taxes in India and GST Notes for SSC Exams

Taxes are the main source of income of the government, and the Goods and Services Tax (GST) is the biggest tax reform of India after independence. SSC exams ask about the types of taxes, the GST Council, the types of GST and the items outside GST. These taxes in India and GST notes for SSC explain every point in simple tables with practice questions.

Direct and Indirect Taxes

Taxes by Level of Government

Income Tax Basics

• Income tax is the biggest direct tax and is collected by the Central Government, under the Central Board of Direct Taxes (CBDT).
• Taxes are paid on income above the exemption limit, under slabs fixed in the Budget.
• The Income-tax Act, 2025 replaces the Income-tax Act, 1961, and is to come into effect from 1 April 2026.
• PAN is the Permanent Account Number of 10 characters, and TAN is the Tax Deduction Account Number.
• TDS means Tax Deducted at Source.

What Is GST?

• GST is a single indirect tax on the supply of goods and services, charged at every stage, with a credit for the tax paid on inputs.
• It was introduced from 1 July 2017, and the slogan was "One Nation, One Tax, One Market".
• It was brought by the 101st Constitutional Amendment Act, 2016, and Article 279A created the GST Council.
• 1 July is celebrated as GST Day.
• GST is a destination-based tax, which means that it goes to the state where the goods or services are consumed.

Types of GST

GST Council

GST Rates

GST has had several rate slabs, and the Government revised the rate structure in 2025 to make it simpler. The rates keep changing with the decisions of the GST Council, so check the latest rate list before the exam.

Items Outside GST

• Alcohol for human consumption is outside GST, and the states tax it.
• Petroleum products like petrol and diesel have not been brought under GST.
• Electricity is outside GST.
• Some items such as fresh vegetables, milk and unpacked food grains are exempt (zero rated).

Important GST Terms

Earlier Taxes Merged in GST

• Central taxes: central excise duty, service tax and additional customs duty.
• State taxes: VAT, entertainment tax, octroi and luxury tax.

Quick Tips

• Remember that GST started on 1 July 2017 under the 101st Amendment.
• Learn the four types of GST and where each goes.
• Remember that the GST Council is chaired by the Union Finance Minister.
• Check the latest GST rates and news from the current affairs.

Quick Revision Points

• GST was introduced on 1 July 2017.
• The 101st Amendment Act, 2016 brought GST.
• The GST Council is formed under Article 279A.
• IGST is charged on the supply between two states.
• Alcohol for human consumption is outside GST.

Practice Questions With Answers

1. On which date was GST introduced in India?
   Answer: 1 July 2017
2. Which Constitutional Amendment introduced GST?
   Answer: 101st Amendment
3. Under which Article is the GST Council formed?
   Answer: Article 279A
4. Who is the chairperson of the GST Council?
   Answer: The Union Finance Minister
5. Which GST is charged on the supply between two states?
   Answer: IGST
6. Which tax is a direct tax: income tax or GST?
   Answer: Income tax
7. How many digits are there in a GSTIN?
   Answer: 15
8. What does ITC stand for?
   Answer: Input Tax Credit
9. Which item is outside GST: alcohol for human consumption or soap?
   Answer: Alcohol for human consumption
10. What is PAN?
    Answer: Permanent Account Number

How to Practise This Chapter

Make a table of the direct taxes, the indirect taxes and the types of GST, and revise it daily. Then solve questions from our practice papers, the free SSC quizzes and the previous year papers page. Read the previous chapter, Banking System of India, and the related Important Constitutional Amendments. See all topics on the Indian Economy notes page.

Frequently Asked Questions

What is GST?

GST is the Goods and Services Tax, a single indirect tax on the supply of goods and services, with credit for the tax paid on inputs.

When was GST introduced in India?

GST was introduced on 1 July 2017 with the slogan One Nation, One Tax, One Market.

Which Amendment brought GST?

The 101st Constitutional Amendment Act of 2016 brought GST.

What is the GST Council?

The GST Council is a body under Article 279A, chaired by the Union Finance Minister, which decides the GST rates and rules.

What are CGST, SGST and IGST?

CGST goes to the Centre and SGST goes to the state for the supply within a state. IGST is charged on the supply between states and on imports.

What is input tax credit?

Input tax credit is the credit for the GST paid on purchases, which can be used to reduce the GST to be paid on sales.

What is the difference between direct and indirect tax?

A direct tax is paid by the person on whom it is levied, such as income tax. An indirect tax is collected through the seller, such as GST.

Which items are outside GST?

Alcohol for human consumption, electricity and petroleum products such as petrol and diesel are outside GST.

What is a GSTIN?

GSTIN is the 15-digit identification number given to a registered taxpayer under GST.

Which taxes were merged into GST?

Taxes such as central excise duty, service tax, VAT, entertainment tax and octroi were merged into GST.

Where can I check the latest GST rates?

Check the latest decisions of the GST Council on the official GST website, because the rates change from time to time.

How many questions come from taxes and GST in SSC exams?

Usually one or two questions come from taxes and GST in SSC General Awareness papers, but the number changes from year to year.