IGST – Full Form, Features, and Taxonomy

The full form of IGST is Integrated Goods and Service Tax and the act related to it is IGST Act 2017. As per the IGST Act, IGST will apply to all inter-state supply goods or/and services. 

What is IGST? 

IGST is a type of tax that is levied on the inter-state supply of any goods or services or both, including the following special scenarios: 

1. Import of goods or/and services into the territory; 
2. Export of goods or/and services outside the Indian territory; 
3. Any supply that is deemed export or import of goods or/and services; 
4. Any supply of goods or/and services to or from SEZ or EOU 
5. Any supply of goods or/and services to the foreign tourists 

Origin of IGST Act 

The IGST (Integrated Goods and Services Tax Act, 2017) Act was introduced by the government to levy, collect, and administer the tax on the interstate, export, import, and SEZ supplies. IGST Act applies to the whole of India including the State of Jammu and Kashmir. 

IGST Act Salient Features 

Here are the salient features of the IGST Act: 

1. Seamless flow of Input tax credit (ITC) chain on inter-State exchanges. 
2. No necessity to pay tax forthright or blockage of funds for the inter-state vendor or purchaser. 
3. IGST is a self-monitoring Act 
4. Streamline the functions of CGST and SGST or UTGST Act 
5. No guarantee of refund of taxes paid for the States in which goods or/and services are exported, as ITC is availed while making good on the assessment. 
6. A supplier making inter-state supplies will need to register under GST enhancing compliance level. 

IGST Taxonomy 

The IGST Act includes 

• 11 Chapters, 
• 33 Sections, and 
• 8 Definitions 

IGST Example 

Mr. X supplier from Delhi, sold goods to Mr. Y, a buyer from Rajasthan for INR 1,00,000. Assuming, IGST @ 5%. 

So, as we can see that the transaction is inter-state. So, Mr. X needs to pay IGST of INR 5,000 (1, 00,000 x 5%). 

Distribution of IGST Revenue 

The state in which goods or services or both are imported enjoys the benefit of IGST revenue. At first, the trader needs to pay the IGST to the central government. After which, the Central Government shares the IGST received as per the rates fixed by the GST authorities. 

Tracking IGST Refund Status 

You just need to follow the below-mentioned step to track IGST Refund status: 

Step 1: Open and log in to the GST portal 

Step 2: Choose Services from the menu bar. 

Step 3: Afterwards choose the track status option from the Refund. 

Step 4: Fill out the financial year and month. 

Step 5: Click on the search button. 

Step 6: Once you click on it you will be able to track the IGST refund status. 

Important Points to Remember about IGST 

You need to keep the following points in mind about IGST: 

1. IGST is applicable on inter-state supply, SEZ, or EOU supply, export, and import of goods or/and services. 
2. The state in which goods or/and services are supplied gets the final tax revenue. 
3. Integrated Goods and Service Tax (IGST) includes both state’s share (SGST) and the central government’s share (CGST) of the tax. In short IGST = CGST + SGST or UTGST.