Section 2. The present tax system on goods and services in the Union territories is facing certain difficulties which are as under

2. The present tax system on goods and services in the Union territories is facing certain difficulties which are as under— (a) the multiplicity of taxes at the Central and State levels has resulted in a complex indirect tax structure in the country that is ridden with hidden costs for the trade and industry; (b) there is no uniformity of tax rates and structure across the States and there is cascading of taxes due to "tax on tax"; and (c) the credit of excise duty and service tax paid at the stage of manufacture is not available to the traders while paying the State level sales tax or value added tax, and vice-versa . Further, the credit of State taxes paid in one State cannot be availed in other States. Hence, the prices of goods and services get artificially inflated to the extent of this "tax on tax". 2. Definitions .—In this Act, unless the context otherwise requires,— (1) "appointed day" means the date on which the provisions of this Act shall come into force; (2) "Commissioner" means the Commissioner of Union territory tax appointed under section 3; (3) "designated authority" means such authority as may be notified by the Commissioner; (4) "exempt supply" means supply of any goods or services or both which attracts nil rate of tax or which may be exempt from tax under section 8, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply; (5) "existing law" means any law, notification, order, rule or regulation relating to levy and collection of duty or tax on goods or services or both passed or made before the commencement of this Act by Parliament or any Authority or person having the power to make such law, notification, order, rule or regulation; (6) "Government" means the Administrator or any Authority or officer authorised to act as Administrator by the Central Government; (7) "output tax" in relation to a taxable person, means the Union territory tax chargeable under this Act on taxable supply of goods or services or both made by him or by his agent but excludes tax payable by him on reverse charge basis; - (8) "Union territory" means the territory of,— (i) the Andaman and Nicobar Islands; (ii) Lakshadweep; 3[(iii) Dadra and Nagar Haveli and Daman and Diu; (iv) Ladakh;] (v) Chandigarh; or (vi) other territory. 1. Subs. by Act 12 of 2020, s. 136, for "Dadra and Nagar Haveli, Daman and Diu".