Introduction of GST required amendments in the Constitution so as to concurrently empower the Centre and the States to levy and collect the GST. Necessary clauses were introduced and amended vide 101^st Constitutional Amendment Act.

Article 366(12A) of the Constitution defines GST to mean any tax on supply of goods or services or both except tax on supply of alcoholic liquor for human consumption. GST is a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at national level. Therefore, the Goods and Services Tax (GST) is a tax on goods and services.  GST is a dual taxation where Centre and States simultaneously levy taxes on a common base.

It is an indirect tax that has mostly superseded several other indirect taxes in India, such as excise duty, VAT / Sales Tax, and Services Tax. There are certain indirect tax levies which are still remained even post GST regime (for instance Central Excise on Tobacco products and Petroleum Products, State Excise & State VAT on Alcohol liquor etc.

By amalgamating a large number of Central and State taxes into a single tax, it has mitigated cascading or double taxation in a major way and paved the way for a common national market. From the consumer point of view, the biggest advantag is reduction in the overall tax burden on goods. The Goods and Services Tax Law is a multi-stage, destination-based tax that is applied to all value additions against the earlier principle of origin based taxation.