What is the full form of IGST?
The full form of IGST is the Integrated Goods and Services Tax. The GST category applies to taxes levied on interstate purchases or supplies of taxable services and goods and imports of services and goods. The Central Government collects IGST and it is subsequently distributed among all the respective states.
When a good or service travels from one state to another state, IGST is compensated. Between the central & state governments, the tax is distributed. To settle the interstate tax amounts, the state compromises with the central government and not with other governments.
Characteristics of IGST
The GST act governs IGST levies. The Centre would levy IGST, that would be CGST plus SGST, on all inter-state payments of taxable supplies, as per the IGST Act. The Central Government shall levy the tax and the tax shall be distributed between the union and states in the manner provided by the legislation of Parliament mostly on suggestions of the Goods & Services Tax Council.
- The inter-state demand for goods and services is valid.
- It implies that the consuming state receives the SGST component of IGST Tax.
- Input Tax Credit chain transparency in inter-state supplies is maintained.
- The earlier CST (Central Sales Tax) Act, 1956, was abolished.
- Integrated GST also refers to products and services being imported into India. The basic principle is that any carriage of products or services during the importation of goods/ services into the union of India is known as an inter-state exchange or exchange supply and is, therefore, the liability of IGST.