IGST is levied on inter-state supply of goods and services to monitor inter-state trade and ensure SGST accrues to the consuming state. IGST rate is equal to CGST plus SGST rate and is collected by the central government on inter-state transactions. Export of goods or services are considered zero-rated supplies under IGST and the exporter can claim refund of IGST paid or supply under bond without paying tax and claim refund of unutilized ITC. Import of goods is subject to IGST in addition to customs duty, while import of services where supplier is outside India, recipient within India and place of supply is India are liable to IGST on reverse charge.

1. BY-SHUBHI SHRIVASTAVA

2. Integrated Goods and Services Tax Act, 2017
(IGST):
IGST is a mechanism to monitor the inter-state
trade of goods and services and ensure that the
SGST component
accrues to the Consumer State. It would maintain
the integrity of ITC chain in inter-state supplies.
The IGST rate would
broadly be equal to CGST rate plus SGST rate.
IGST would be levied and collected by the Central
Government on
all inter-State transactions of taxable goods or

3.  The revenue of inter-state sales will not accrue to the
exporting state and the exporting state will be required
to transfer to the Centre the credit of SGST/UTGST
used in payment of IGST.
LOCATION OF SUPPLIER OR PLACE OF SUPPLY
IN SAME STATE IN DIFFERENT STATE
HOW TO DECIDE IGST OR CGST+SGST
INTERSTSTE
IGST

5. (a) U/s 5(1) of IGST Act, 2017 there shall be levied a tax-
(b) Called the Integrated Goods and Services Tax (IGST)
(c) On all the inter-state supplies of goods or services or both,
except on supply of alcoholic liquor for human consumption
(d) On the value determined u/s 15 of CGST Act, 2017and
(e) At such a rate (maximum 40%,) as notified by the Central
Government on recommendation of GST Council and
(f) Collected in such a manner as may be prescribed and
(g) Shall be paid by the taxable person.

6.  Provided further that IGST will be imposed on goods/
services imported into India.
 U/s 5(2) of IGST Act, 2017, the CGST of following supply
shall be levied with the effect from such date as notified
by the Central Government on recommendation of GST
Council-
 Petroleum crude
 High speed diesel
 Motor spirit (commonly known as petrol)
 Natural gas
 Aviation turbine fuel

7. GOODS
IMPORTATIO
N
SECTION 2(10) OF
IGST ACT 2017
BRINGING GOODS
INTO INDIA FROM
PLACE OUTSIDE
INDIA
LEVY OF TAX
UNDER THE
CUSTOM ACT 1962
SECTION 2(11) OF
IGST ACT 2017-
SUPPLIER- Outside
INDIA
RECIPIENT –
Located in INDIA
PLACE OF SUPPLY
OF SERVICE IN
INDIA
LEVY OF TAX
UNDER IGST
REGISTERED
RECIPIENT ON
REVERSE CHARGE
UNREGISTERED
PERSON PAYABLE
BY SUPPLIER
SERVICES

9. Import of Goods-
The import of goods has been defined in the IGST Act, 2017 as
bringing goods into India from a place outside India. All imports
shall be deemed as inter-State supplies and accordingly Integrated
tax shall be levied in addition to the applicable Custom duties. The
IGST Act, 2017 provides that the integrated tax on goods imported
into India shall be levied and collected in accordance with the
provisions of the Customs Tariff Act, 1975 on the value as
determined under the said Act at the point when duties of customs
are levied on the said goods under the Customs Act, 1962. The
integrated tax on goods shall be in addition to the applicable Basic
Customs Duty (BCD) which is levied as per the Customs Tariff Act.
In addition, GST compensation cess, may also be leviable on
certain luxury and demerit goods under the Goods and Services
Tax (Compensation to States) Cess Act, 2017.

10. The Customs Tariff Act, 1975 has accordingly been
amended to provide for levy of integrated tax and the
compensation cess on imported goods. Accordingly, any
goods which are imported into India shall, in addition to the
Basic Customs duty, be liable to integrated tax at such rate
as is leviable under the IGST Act, 2017 on a like article on
its supply in India. Further, the value of the goods for the
purpose of levying Integrated tax shall be assessable value
plus Customs Duty levied under the Act, and any other duty
chargeable on the said goods under any law for the time
being in force as an addition to, and in the same manner as,
a duty of customs.

11.  Import of services Import of services has specifically been defined
under IGST Act, 2017 and refers to supply of any service where the
supplier is located outside India, the recipient is located in India and
the place of supply of service is in India.
 As per the provisions contained in Section 7(1) (b) of the CGST Act,
2017, import of services for a consideration whether or not in the
course or furtherance of business shall be considered as a supply.
Thus, in general, import of services without consideration shall not
be considered as supply. However, business test is not required to
be fulfilled for import of service to be considered as supply.
 Furthermore, in view of the provisions contained in Schedule I of the
CGST Act, 2017, the import of services by a taxable person from a
related person or from a distinct person as defined in Section 25 of
the CGST Act, 2017, in the course or furtherance of business shall
be treated as supply even if it is made without any consideration.

13. IGST is levied on the supply of any goods and services in the course of inter-state
trade or commerce. As per the
IGST Act, export and import of goods and services are deemed to be a supply in
the course of inter-state trade
or commerce. Supplies of goods and services for exports have been categorised
as ‘Zero Rated Supply’ implying
that goods could be exported under bond or Letter of Undertaking without
payment of integrated tax followed
by claim of refund.
Under section 7(5) of IGST Act, 2017 supply will be treated, as inter-state supply
when
• the supplier is located in India and
• the place of supply is outside India or
• place of supply is SEZ unit.
Further, exports would be considered as “Zero rated supply” under section 16 of
IGST Act.
ZERO RATED SUPPLY-

14. Any person making zero rated supply (i.e. any exporter) shall be
eligible to claim refund under either of the
following options, namely:-
(a) he may supply goods or services or both, subject to such
conditions, safeguards and procedure as may be
prescribed, on payment of integrated tax and claim refund of such
tax paid on goods or services or both
supplied, in accordance with the provisions of section 54 (Refunds)
of the Central Goods and Services Tax Act or the rules made there
under.
(b) he may supply goods or services or both under bond or Letter of
Undertaking (LUT), subject to such conditions,
safeguards and procedure as may be prescribed, without payment
of integrated tax and claim refund of
unutilised input tax credit

15. C:UserslenovoDesktopDownloadsCMA GST and Custom
Law Paper-11New (1).pdf
http://www.wbnsou.ac.in/online_services/SLM/PG/MCOM-
5B.pdf
https://www.cbic.gov.in/resources//htdocs-
cbec/gst/Imports_in_GST_Regime.pdf
REFERENCES