Which of the following statements correctly describes the main feature of the Goods and Services Tax (GST) Constitutional Amendment Bill passed by the Rajya Sabha in August 2016?

Introduction / Context:
The Goods and Services Tax (GST) is a major indirect tax reform in India that replaced a complex web of central and State taxes with a more unified system. The Constitution (One Hundred and First Amendment) Act, based on the GST Bill passed by Parliament in 2016, created the legal framework for GST. Exam questions frequently ask which statement accurately captures the key feature of this reform. This question focuses on the scope of taxes subsumed and clarifies common misconceptions about sectors like alcohol and petroleum.

Given Data / Assumptions:

• The context is the GST Constitutional Amendment Bill passed by the Rajya Sabha in August 2016.
• Option a suggests only central taxes are replaced.
• Option b states that both central and State taxes are subsumed.
• Option c claims GST will be levied on alcoholic liquor at a fixed 25 percent rate.
• Option d asserts that petroleum and petroleum products will never be subject to GST.

Concept / Approach:
The essential feature of GST is that it is a destination based tax levied on the supply of most goods and services, and it replaces multiple indirect taxes levied by both the Centre and the States. Central taxes like excise duty, service tax and additional customs duty, and State taxes like VAT, entry tax and entertainment tax (except those on local bodies) were brought within the GST framework. Alcoholic liquor for human consumption was explicitly kept outside GST; States continue to tax it separately. Petroleum products were constitutionally kept under GST but their taxation under GST was deferred; the GST Council can recommend when to bring them fully under GST. Therefore, the statement correctly reflecting the main feature is that GST subsumes both central and State taxes into a unified tax system.

Step-by-Step Solution:
Step 1: Examine option a: It claims only central taxes are replaced by GST, which ignores the key fact that many State taxes are also subsumed; thus it is incomplete and misleading.Step 2: Examine option b: It states that both central and State taxes and duties are subsumed into a unified GST framework, which matches the core idea of the reform.Step 3: Examine option c: It specifies a uniform 25 percent GST on alcoholic liquor, but liquor for human consumption has been kept outside GST; this statement is incorrect.Step 4: Examine option d: It says petroleum and petroleum products shall not be subject to GST under any circumstances; in fact, the Constitution allows them under GST with implementation subject to the GST Council's recommendation, so this statement is also wrong.Step 5: Conclude that option b is the only statement correctly describing the main feature of the GST Constitutional Amendment Bill.

Verification / Alternative check:
Summaries of the 101st Constitutional Amendment and GST FAQs clearly say that GST replaced many earlier indirect taxes of both the Centre and the States. They list a range of subsumed taxes—central excise, service tax, additional customs duty, State VAT, entry tax and so on. The same summaries note that alcohol for human consumption is outside GST and that petroleum products are to be brought under GST at a later date as decided by the GST Council. No official description restricts GST to central taxes alone, nor declares that petroleum products will never be under GST. This confirms that option b is the accurate description.

Why Other Options Are Wrong:

• Option a: It underplays the reform by mentioning only central taxes, ignoring that States also surrendered many of their indirect taxes to create a unified system.
• Option c: It is factually wrong about alcohol, which is kept outside GST; States continue to levy their own duties and taxes on liquor.
• Option d: It incorrectly claims that petroleum products will not be subject to GST under any circumstances, whereas the Constitution allows them to be included when the GST Council so recommends.

Common Pitfalls:
Many candidates remember that alcohol and petroleum were treated specially but misinterpret this to mean they are permanently exempt or automatically taxed under GST. Others simplify GST as just a central measure and overlook the federal nature of the reform. To avoid such mistakes, remember that the hallmark of GST is the merging of both central and State indirect taxes into a single, coordinated framework, while some items like alcohol are left to the States and petroleum is kept in a transitional category.

Final Answer:
The correct statement is that GST subsume(s) both central and State taxes and duties into a unified Goods and Services Tax framework, as described in option b.