In the Indian context, Goods and Services Tax (GST) proposed to be levied is NOT correctly described as which one of the following types of taxes?

Introduction / Context:
Goods and Services Tax is a comprehensive indirect tax that subsumes many earlier central and state taxes in India. Questions on GST often test whether you understand its nature as a value added, consumption based and destination based tax. This question reverses the pattern by asking which description does not correctly apply to GST.

Given Data / Assumptions:
- The tax being discussed is GST in India.
- Four possible descriptions are given: gross value tax, value added tax, consumption tax and destination based tax.
- You must identify the description that does not match the conceptual design of GST.

Concept / Approach:
GST is designed as a value added tax, meaning tax is levied only on the value added at each stage of production and distribution, with input tax credits eliminating cascading. It is also a consumption tax because the burden ultimately falls on final consumption rather than on investment or production. GST is destination based, which means tax revenue accrues to the State where the goods or services are consumed, not where they are produced. It is not a gross value tax, because gross value taxes do not allow deduction of input taxes and therefore lead to tax on tax. Thus gross value tax is the incorrect description.

Step-by-Step Solution:
Step 1: Option A, gross value tax, implies a tax on the full value of transactions at each stage without allowing credits for tax paid on inputs. This leads to cascading of taxes. GST specifically aims to avoid such cascading through the input tax credit mechanism, so this description does not fit.Step 2: Option B, value added tax, is accurate because GST taxes only the incremental value at each stage after allowing credits for tax already paid on inputs.Step 3: Option C, consumption tax, is accurate because GST is ultimately borne by final consumers when they purchase goods and services; business inputs are generally eligible for credits.Step 4: Option D, destination based tax, is accurate because under GST the tax revenue goes to the jurisdiction where consumption takes place, especially reflected in the design of Integrated GST for inter state supplies.

Verification / Alternative check:
You can verify by recalling common explanatory phrases used by the Government and tax authorities. They emphasise that GST is a value added tax with a seamless credit chain, levied on consumption and destination based. You will rarely see GST described as a gross value tax, because that would contradict the very purpose of replacing multiple cascading taxes with a cleaner system.

Why Other Options Are Wrong:
Option B is wrong as an answer because GST is indeed a form of value added tax. Option C is wrong because GST is designed to tax final consumption rather than intermediate investment. Option D is wrong because destination based allocation of revenue is a key feature of GST, especially in a federal structure.

Common Pitfalls:
Some candidates may misinterpret the term gross value tax as simply a fancy label for any large tax system and may not recall its technical meaning of taxing the full value without credits. Others may overlook the importance of the input tax credit mechanism. A clear understanding of the differences between gross value and value added approaches is essential for answering questions about modern tax reforms like GST.

Final Answer:
The description that does not correctly apply to GST in India is Gross value tax.