What is IGST?

IGST is a part of Goods and Service Tax(GST). Integrated Goods And Service Tax is a tax levied on all Inter – State supplies of goods and / or services and will be governed by the IGST Act. IGST is a concept of one tax one nation. Under Article 269 A of the Constitution, the inter – state trade and commerce activities that involve the movement of commodities and services shall be levied with an integrated tax (IGST) under the GST regime. The IGST rate would broadly be equal CGST rate plus SGST rate.

Sameer a businessman from Delhi has sold goods to Ashutosh from Uttar Pradesh worth Rs.2,00,000. The GST rate is 18% comprised of 18% IGST. In such a situation, the dealer has to charge Rs. 18,000 as IGST. This IGST will go to the center.

Features of IGST:

1. IGST equals to CGST + SGST.
2. It will lower tax burden by taxing Inter – State transaction only once.
3. It is a destination based tax and will accrue to importing state.
4. B2B transactions – tax will flow to the State where Purchaser claims Input Tax Credit.
5. B2C transactions – tax will flow to the State of Consumer, otherwise tax will remain in the State Of Seller.

Benefits of IGST:

1. It helps in maintaining of uninterrupted ITC chain on inter – State transactions.
2. It helps in non payment of any upfront tax or substantial blockage of funds for the inter – State seller or buyer.
3. No refund can be claimed in exporting State, as ITC is used up while paying the tax.
4. It is a self monitoring model
5. It ensures tax neutrality while keeping the tax regime simple.
6. It requires simple accounting with no additional compliance burden on the taxpayer.
7. It helps in facilitating in ensuring high level of compliance and generate higher collection efficiency.

The 26th GST Council meet, that took place on Saturday approved the introduction of e-way Bill for inter – state movement of goods worth more than 50,000 from April 1, 2018. The Council failed to reach a concensus on the proposed simplification of returns filing process. The ongoing filing returns system of summary return GSTR-3B and sales return GSTR-1 has got extended till June. Finance Minister, Arun Jaitely said, the Group of Ministers entrusted the task of resolving IT related issues finding out ways to simplify the return process.

The Council has decided to implement the e-wallet scheme, which gives refund to exporters under GST, by October 1, 2018. Also merchant exporters can pay 0.1% tax on goods procured for export and a get a refund for the same. The TDS deduction and TCS collection by e-commerce operators has been delayed till June 30, 2018. The decision to bring extra neutral alcohol under GST got deferred as states and Centre failed to reach a consensus on the same.

Let us look upon the UpdatedNew GST Rates from April 1, 2018:

Items Old Tax Rate Country
Second Hand medium and large cars and SUV’s 28% 18%
LPG supply for household domestic consumers by private LPG distributors 18% 5%
Bio-fuels powered buses 28% 18%
Sugar boiled confectionary 18% 12%
Drinking water packed in 20 Liter bottles 18% 12%
Drip Irrigation System 18% 12%
Cigarette filled rods 12% 18%
Tailoring service 18% 5%
Admission to Theme parks, Water parks, etc 28% 18%
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