Ch 39 - Integrated Goods and Services Tax (IGST) | GST Saral by CA Dhruv Aggarwal PDF Download

 Page 1


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 39 - Integrated Goods and Servi ces Tax (IGST) 
 
 
 
 
 
CHAPTER 39 
 
Integrated Goods and Services Tax (IGST) 
 
39.1 IGST for inter-State transactions 
 
In case  of Inter State  supply of goods  and  services,  there  will be integrated  GST (IGST)  imposed  by 
Government of India [Article 269A(1) of Constitution of India inserted w.e.f. 16-9-2016]. 
 
Equivalent IGST (CVD) will also be imposed on imports [Explanation to Article 269A(1) of Constitution of 
India] 
 
The IGST Rate is expected to be double the CGST rate. 
 
IGST and CGST rates will be same alloverIndia and will not vary from State to State. Otherwise there will 
be utter chaos. 
Revenue from IGST will be apportioned among Union and States by Parliament on basis of recommendation 
of Goods and Services Tax Council [Article 269A(2) and Article 270(1A) of Constitution of India inserted 
w.e.f. 16-9-2016]. 
This apportionment will be required as input tax credit of IGST can be used for SGST and vice versa. 
 
Since IGST will be on 'supply of goods or services', IGST will be payable on inter-state stock transfers, 
branch transfers etc. 
39.2 IGST is intermediary tax 
 
IGST is imposed under IGST Act. The basic aspects of IGST are as follows - 
 
?   IGST (Integrated GST) is payable on supply of goods or services or both in inter-state supplies. 
?   IGST is intermediary tax mainly on B2B (Business to Business) transactions. It is not envisaged as 
final tax as input tax credit of IGST will be available to recipient in another State. 
?   If IGST is paid on B2C transaction (Business to Customer), the State where goods or services or 
both are consumed will get their share of SGST. 
?   IGST Rate is expected to be double the CGST rate and will be uniform alloverIndia. 
?   IGST will ensure that goods or services or both and taxes move together across the country, which 
will ensure seamless and tax free movement of goods and services within the country. 
?   In view of IGST, there will be no need to claim refund of input taxes, except in case of physical 
exports and supplies to SEZ. 
?   Exports and supplies to Special Economic Zones (SEZ) are zero rated i.e. input tax credit will be 
available even if tax is not paid on output. This will make exports and supplies to SEZ rea ly tax free. 
?   IGST, concept of 'supply' instead of sales and removal of distinction between goods and services re 
game changers in GST. 
Page 2


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 39 - Integrated Goods and Servi ces Tax (IGST) 
 
 
 
 
 
CHAPTER 39 
 
Integrated Goods and Services Tax (IGST) 
 
39.1 IGST for inter-State transactions 
 
In case  of Inter State  supply of goods  and  services,  there  will be integrated  GST (IGST)  imposed  by 
Government of India [Article 269A(1) of Constitution of India inserted w.e.f. 16-9-2016]. 
 
Equivalent IGST (CVD) will also be imposed on imports [Explanation to Article 269A(1) of Constitution of 
India] 
 
The IGST Rate is expected to be double the CGST rate. 
 
IGST and CGST rates will be same alloverIndia and will not vary from State to State. Otherwise there will 
be utter chaos. 
Revenue from IGST will be apportioned among Union and States by Parliament on basis of recommendation 
of Goods and Services Tax Council [Article 269A(2) and Article 270(1A) of Constitution of India inserted 
w.e.f. 16-9-2016]. 
This apportionment will be required as input tax credit of IGST can be used for SGST and vice versa. 
 
Since IGST will be on 'supply of goods or services', IGST will be payable on inter-state stock transfers, 
branch transfers etc. 
39.2 IGST is intermediary tax 
 
IGST is imposed under IGST Act. The basic aspects of IGST are as follows - 
 
?   IGST (Integrated GST) is payable on supply of goods or services or both in inter-state supplies. 
?   IGST is intermediary tax mainly on B2B (Business to Business) transactions. It is not envisaged as 
final tax as input tax credit of IGST will be available to recipient in another State. 
?   If IGST is paid on B2C transaction (Business to Customer), the State where goods or services or 
both are consumed will get their share of SGST. 
?   IGST Rate is expected to be double the CGST rate and will be uniform alloverIndia. 
?   IGST will ensure that goods or services or both and taxes move together across the country, which 
will ensure seamless and tax free movement of goods and services within the country. 
?   In view of IGST, there will be no need to claim refund of input taxes, except in case of physical 
exports and supplies to SEZ. 
?   Exports and supplies to Special Economic Zones (SEZ) are zero rated i.e. input tax credit will be 
available even if tax is not paid on output. This will make exports and supplies to SEZ rea ly tax free. 
?   IGST, concept of 'supply' instead of sales and removal of distinction between goods and services re 
game changers in GST. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
?   IGST is a unique concept nowhere else been tried in the World.