IGST Basics | GST

IGST Basics includes getting the knowledge of IGST.

Basically, IGST is charged whenever there is a movement of goods from one place to another. Let us suppose that some goods are to be moved from Tamil Nadu to Kerala. So, in this case, IGST will be levied on these goods and Finally, the revenue received from its imposition is shared by State and Central Govt.as per the rates fixed by the authorities.  GST is a kind of Act levied on taxation which is expected to kick from 1 April 2017. Under this law, it works at replacing all indirect taxes levied on goods and services by the Indian Central and State Governments.

Inter-State Transactions: –

  • Centre would levy IGST which would be CGST+SGST.
  • IGST would be levied on all Inter-State Transactions of taxable goods and services with exemptions for consignment or stock transfer of goods and services.
  • Inter-State Dealer will pay IGST after adjusting available IGST, CGST and SGST on the purchase.

SGST

  • It stands for State Goods and Services Tax.
  • It is levied by the states through statue on all transactions of goods and services made for a consideration.
  • Exceptions would be exempted goods and services, goods kept out of GST and transaction below prescribed threshold limits.
  • State GST would be paid to the accounts of the respective state.

Central GST(CGST)

  • It is levied by the Centre through a separate statue on all transactions of goods and services made for consideration.
  • CGST would be levied across the value chain.
  • Rates for CGST would be prescribed appropriately reflecting revenue consideration and acceptability.

IGST on Imports and on Domestic Goods Difference

Well, In Integrated Goods and Services Tax, IGST is payable for each and every transaction before taking imported goods and this is mandatory whereas IGST is paid monthly along with returns of IGST against domestic Goods and Services.

IGST Illustration

Illustration 1 – IGST of Rs. 8000/- is availed as credit by Karnataka buyer. Karnataka dealer sells the goods arts 2,00,000/-attracting CGST of say Rs 16,000/- and SGST of Rs. 16,000/-. If IGST of Rs 8,000/- is used to pay the SGST then the Karnataka Govt. has to transfer Rs.8,000/-to the center.

Illustration 2 – Manipur producer selling to Kerala purchaser for Rs.1,00,000/-. IGST payable assuming the rate of tax is Rs.8,000/-. Rs.8,000/-can be paid by adjusting: –

  • Inter-State Purchases(IGST) Rs.3,000/-.
  • Local purchases(CGST) Rs.1,500/-
  • Local purchases(SGST) Rs.1,500/-

Since the dealer has used SGST of Manipur to the extent of Rs.1,500/-, Centre has to transfer Rs.1,500/- to Govt. of Manipur.

 

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