The tax imposed under the IGST Act on the supply of any goods and additional services during interstate trade or commerce is known as the “Integrated Goods and Services Tax” (IGST).
The Centre on Interstate Supplies may levy and collect IGST. In addition to SGST, IGST would be substantially CGST and should be applied to all interstate taxable ventures and goods supplies. After altering the available credit of IGST, CGST, and SGST on his purchases, the interstate seller will pay IGST on value expansion.
The Exporting State will send the SGST credit used to pay the IGST to the Centre. When the importing dealer releases his yield tax obligation in his home state, he will claim credit for the IGST. The IGST credit used to pay the SGST will be transferred by the Centre to the State that is bringing in the money.
The Central Agency receives the pertinent data in addition, and it acts as a clearinghouse mechanism, verifies the cases, and notifies the relevant governments to transfer the assets.
IGST Features
- Maintenance of uninterrupted ITC chain on inter-State exchanges.
- No forthright payment of tax or considerable blockage of assets for the inter-State seller or buyer
- No refund guarantee in exporting State, as ITC is used up while paying the tax.
- Self-checking model.
- Ensures tax neutrality while keeping the tax regime simple.
- straightforward bookkeeping that spares the taxpayer from additional compliance requirements.
- would make it easier to guarantee an unusual level of compliance and, as a result, greater collection efficiency. The model is capable of managing both business-to-business and “business to consumer” transactions.
IGST Payment
Either ITC or cash should be accepted for the IGST payment. Nonetheless, the hierarchy that follows will be used to apply ITC for GST payment;
- The easiest-to-access ITC of IGST may be utilised to cover IGST.
- Only the dealer would be able to use the SGST ITC to pay the IGST in the unlikely event that the IGST and CGST ITCs are both exhausted.
- Once ITC of IGST is exhausted, the ITC of CGST might be used for payment of IGST
- Center and the exporting state: The exporting state should pay the sum equal to the ITC of SGST used by the supplier in the exporting state to the Center.
- Center and the bringing in state: The center should pay the sum equal to the ITC of IGST used by a dealer for payment of SGST on intra-state supplies.
