Under the Goods and Services Tax (GST) system in India, which of the following earlier indirect taxes are subsumed or included within GST?

Introduction / Context:
This question tests your understanding of what types of indirect taxes were merged or subsumed into the Goods and Services Tax (GST) system in India. GST was introduced to simplify the complex structure of central and state indirect taxes and to create a unified market. Knowing which taxes are included in GST is important for Indian economy and taxation related questions in competitive examinations.

Given Data / Assumptions:

• India shifted to a GST regime that combines various central and state level indirect taxes.
• Taxes on lottery, betting, and gambling and state sales or value added taxes are specifically mentioned in the options.
• Customs duties and some other levies continue to exist outside GST, with certain exceptions.
• The question asks which of the listed taxes are included within the scope of GST.

Concept / Approach:
GST in India is designed as a comprehensive tax on the supply of most goods and services. It replaces multiple central and state taxes such as central excise duty on manufactured goods (other than some petroleum products), service tax, and state level value added tax on most goods. It also covers special taxes on lottery, betting, and gambling which are treated as taxable supplies under GST at specified rates. State VAT and taxes on lottery previously formed part of the indirect tax system and are now brought under the GST umbrella, subject to the special treatment of a few excluded items like basic customs duty and some petroleum related taxes.

Step-by-Step Solution:
Step 1: Recall that GST subsumed most state level taxes on sale of goods, including sales tax and value added tax on many commodities.Step 2: Note that under GST law, the supply of lottery, betting, and gambling is explicitly taxable at relatively high rates.Step 3: Therefore, both the earlier taxes on lottery and the VAT or sales tax structure on many goods were effectively merged into the GST framework.Step 4: Customs duties on imports, particularly basic customs duty, continue outside GST, though integrated GST may be levied on imports in addition.Step 5: It is not correct to say that none of the major indirect taxes have been merged, because GST is precisely a merger of many such levies.Step 6: Consequently, the correct option is the one stating that both lottery related taxes and sales or VAT taxes are included in GST.

Verification / Alternative check:
Before GST, a consumer buying goods or services might face separate levies such as state VAT, central excise, service tax, and entertainment or betting taxes, leading to cascading effects and different effective rates in each state. With the introduction of GST, these were largely replaced by Central GST, State GST, and Integrated GST, which apply to supplies across states. Taxable supplies specifically include lottery and betting, as listed in GST rate schedules, and general sales of goods that were earlier covered by VAT. This supports the assertion that both categories of earlier taxes are now part of the GST regime.

Why Other Options Are Wrong:
Option A is incomplete because it includes only lottery related taxes and ignores sales or value added taxes that were also subsumed. Option B mentions only state level VAT or sales taxes and ignores the fact that lottery and betting are also taxable supplies under GST. Option D is incorrect because basic customs duty is not replaced by GST; instead, GST is levied in addition to customs in some cases. Option E is clearly wrong because the main purpose of GST was to merge multiple indirect taxes into a single unified system.

Common Pitfalls:
One common confusion is between customs duties and domestic indirect taxes; learners sometimes think that all taxes including customs have been merged into GST, which is not the case. Another pitfall is to overlook special sectors like lottery and betting when thinking of GST, assuming that only general goods and services are covered. To answer questions correctly, remember that GST subsumed a wide range of central and state taxes on internal trade and services, while leaving some duties like basic customs duty and certain petroleum taxes outside its scope.

Final Answer:
Under GST in India, both taxes on lottery, betting, and gambling and state level sales or value added taxes are included within the GST framework.