  Understanding the spectral evolution along the `Z'-shaped track in the
hardness-intensity diagram of Z-sources, which are a class of luminous neutron
star low-mass X-ray binaries, is crucial to probe accretion processes close to
the neutron star. Here, we study the horizontal branch (HB) and the normal
branch (NB) of the Z source GX 340+0 using $AstroSat$ data. We find that the HB
and the NB appear as two different types of X-ray intensity dips, which can
appear in any sequence and with various depths. Our $0.8-25$ ~keV spectra of
dips and the hard apex can be modeled by the emissions from an accretion disk,
a Comptonizing corona covering the inner disk, and the neutron star surface. We
find, as the source moves onto the HB the corona is replenished and energized
by the disk and a reduced amount of disk matter reaches the neutron star
surface. We also conclude that quasi-periodic oscillations during HB/NB are
strongly associated with the corona, and explain the evolution of strength and
hard-lag of this timing feature using the estimated coronal optical depth
evolution.
