Cheat Sheet: Integrated Goods and Services Tax (IGST)

1. Constitutional Framework and Basic Structure

1.1 Constitutional Provisions

1.2 Legislative Authority

• IGST Act, 2017 enacted by Parliament under Article 269A
• Entry 92A, List I (Union List) - Taxes on inter-state trade or commerce
• Came into force on 1st July 2017

1.3 Key Definitions

2. Levy and Collection of IGST

2.1 Charging Section

• Section 5: IGST levied on all inter-state supplies of goods or services
• Tax levied on transaction value determined under Section 15 of CGST Act
• Collected by Central Government

2.2 Rate of Tax

• IGST Rate = CGST Rate + SGST/UTGST Rate
• Rates notified: 0%, 0.25%, 3%, 5%, 12%, 18%, 28%
• Rates prescribed on recommendation of GST Council under Section 9

2.3 Inter-State Supply Determination

2.3.1 Supply Involving Movement of Goods

2.3.2 Supply Without Movement of Goods

• Location of goods at time of delivery to recipient determines inter-state nature
• If goods and supplier in different states - inter-state supply

2.3.3 Supply of Services

• Location of supplier and place of supply in different states - inter-state supply
• Place of supply determined as per Sections 10-13 of IGST Act

3. Place of Supply Rules

3.1 Place of Supply of Goods (Section 10)

3.2 Place of Supply of Services (Sections 12-13)

3.2.1 Services to Registered Person (Section 12)

• Location of recipient of services (as per registration)
• Exception: Immovable property-related services - location of immovable property

3.2.2 Services to Unregistered Person (Section 13)

4. Special Provisions

4.1 Imports and Exports (Section 7)

4.2 Supplies in Territorial Waters

• Section 9: Supply in territorial waters treated as supply in coastal state/UT
• Beyond territorial waters: supply in state/UT where supplier's registration exists

4.3 Input Tax Credit of IGST (Section 20)

• IGST credit fully fungible - can be used against CGST, SGST, UTGST
• CGST credit cannot be used against SGST/UTGST and vice versa

5. Apportionment and Settlement

5.1 Apportionment of IGST (Section 17)

• IGST collected by Central Government
• Apportioned between Centre and States as per Article 269A
• Distribution done through settlement mechanism

5.2 Settlement Process (Section 18)

• Centre settles IGST with states based on destination principle
• Credit of IGST used by recipient reduces state's share
• Net IGST transferred to state where consumption occurs
• Settlement done on regular basis as per rules

5.3 Payment and Returns

• IGST paid electronically through GST portal
• Returns filed as per CGST Act provisions (Form GSTR-1, GSTR-3B)
• Same compliance requirements as CGST/SGST

6. Administration and Compliance

6.1 Administrative Framework

• Dual control: Centre and State officers have concurrent jurisdiction
• Section 6: Officers under CGST Act deemed officers under IGST Act
• Section 21: CGST Act provisions apply to IGST (assessment, audit, refund, appeal)

6.2 Registration Requirements

• Single PAN-based registration valid for intra-state and inter-state supplies
• No separate registration required for IGST
• Threshold: Rs. 40 lakhs (Rs. 20 lakhs for special category states) for inter-state suppliers
• Threshold: Rs. 20 lakhs (Rs. 10 lakhs for special category states) for goods suppliers

6.3 Time of Supply

• Same as CGST Act provisions (Section 12 and 13 of CGST Act apply)
• For goods: earliest of invoice date, goods removal, or payment receipt
• For services: earliest of invoice date, service completion, or payment receipt

6.4 Valuation

• Transaction value determined as per Section 15 of CGST Act
• Includes taxes, duties, cesses, freight, insurance, commissions (except discounts)
• Special valuation rules for related persons, agents, job work

7. Zero-Rated Supplies

7.1 Exports of Goods and Services (Section 16)

• Export means supply outside India
• Options: (a) Pay tax and claim refund, or (b) Export under bond/LUT without payment
• LUT facility for exporters with clean track record
• Refund of unutilized ITC available for zero-rated supplies

7.2 Supply to SEZ (Section 16)

• Supply to SEZ unit/developer treated as zero-rated
• Same options as exports: pay and claim refund or supply under bond/LUT
• SEZ unit must provide endorsement/certificate

7.3 Deemed Exports

• Supply to Export Oriented Units (EOU)
• Supply against Advance Authorization/EPCG Scheme
• Refund of IGST paid or concessional rate benefits available

8. Special Transactions

8.1 Job Work (Section 8)

• Movement of goods to job worker: not treated as supply
• Principal supplier liable to pay IGST on final supply
• Place of supply determined based on principal's location and recipient's location

8.2 Consignment and Branch Transfers

• Stock transfer between states: inter-state supply; IGST leviable
• Movement to own branches/depots treated as supply under Schedule I of CGST Act
• Tax invoice required for consignment transfers

8.3 High Seas Sales

• Sale of goods before clearance from customs: import by ultimate buyer
• IGST paid at customs by importer
• Intermediate transactions not subject to IGST

8.4 E-Commerce Supplies

• TCS at 1% by e-commerce operators (0.5% CGST + 0.5% SGST for intra-state; 1% IGST for inter-state)
• Operator liable to collect tax for notified services (transport, accommodation, housekeeping)
• Place of supply determines IGST/CGST+SGST applicability

9. Refunds Under IGST

9.1 Refund Provisions

• Section 19: CGST Act refund provisions apply to IGST
• Refund of excess tax paid, exports, inverted duty structure
• Time limit: 2 years from relevant date

9.2 Types of Refunds

9.3 Refund Process

• Filed electronically through GST portal (Form RFD-01)
• Processed within 60 days; interest at 6% p.a. for delay beyond 60 days
• Sanctioned refund credited to bank account electronically

10. Offences and Penalties

10.1 Applicable Provisions

• Section 20: CGST Act provisions on offences, penalties, prosecution apply to IGST
• Penalty for tax evasion: 100% of tax evaded (minimum Rs. 10,000)
• Penalty for non-filing returns: Rs. 50 per day (max Rs. 10,000)

10.2 Major Offences

10.3 Interest on Delayed Payment

• Interest at 18% p.a. on delayed payment of IGST
• Calculated from due date till payment date
• Applies to IGST liability and reversed ITC

11. Important Distinctions

11.1 IGST vs CGST+SGST

11.2 Determination of Supply Type

• Check location of supplier (state of registration/principal place of business)
• Determine place of supply using Sections 10-13 of IGST Act
• If locations differ: inter-state (IGST); if same: intra-state (CGST+SGST)

12. Integrated Goods and Services Tax (Compensation to States) Cess

12.1 GST Compensation Cess

• Levied on inter-state supply of notified goods (luxury, demerit goods)
• Rates: 1%, 3%, 15%, 22%, or specific rates (e.g., Rs. 4006/unit for large cars)
• Collected along with IGST but separately accounted
• Used to compensate states for revenue loss for 5 years (extended till March 2026)

12.2 Applicability

• Tobacco products, pan masala, aerated waters, motor vehicles, coal
• Levied in addition to IGST (e.g., 28% IGST + 22% cess on luxury cars)
• Same returns and compliance as IGST

13. Key Judicial Pronouncements

13.1 Important Principles

• Place of supply determines nature of supply (inter-state or intra-state)
• IGST credit cannot be denied if transaction is genuine
• Movement of goods is critical for determining place of supply
• Exporter can claim refund of IGST paid or unutilized ITC, not both

13.2 Constitutional Validity

• IGST Act upheld as valid exercise of Parliament's power under Article 269A
• Destination-based taxation model validated
• Settlement mechanism ensures states receive share of IGST

14. Practical Aspects and Exam Tips

14.1 Determining IGST Applicability - Steps

1. Identify location of supplier (registration state)
2. Determine place of supply (Sections 10-13)
3. Compare locations: different = IGST; same = CGST+SGST
4. Check if import/export/SEZ (always IGST)

14.2 ITC Utilization Priority

• Use IGST credit first against IGST liability
• Balance IGST credit: next against CGST, then SGST
• CGST credit only against CGST; SGST credit only against SGST
• Cross-utilization between CGST and SGST not permitted

14.3 Common Exam Scenarios

• Branch transfer from Maharashtra to Gujarat: IGST applicable
• Service provider in Delhi, recipient in Uttar Pradesh: IGST (Section 12)
• Goods imported from abroad: IGST at customs
• Goods exported to USA: Zero-rated (IGST 0%)
• Goods sold on high seas: Ultimate importer pays IGST

14.4 Critical Sections to Remember

• Section 5: Levy of IGST
• Section 7: Inter-state supply (imports, exports, SEZ)
• Sections 10-13: Place of supply rules
• Section 16: Zero-rated supply
• Section 20: ITC utilization of IGST