IGST is intermediary tax

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 all over India.

♦ 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 really tax free.

♦ IGST, concept of ‘supply’ instead of sales and removal of distinction between goods and services re game changers in GST.

♦ IGST is a unique concept nowhere else been tried in the World.