Integrated Goods and Service Tax (IGST) is not A Tax under GST: Goods and Service Tax (GST) has replaced almost 17 indirect taxes in India. Amongst all, Central Excise Duty, Service-tax and State Value Added Tax (VAT) were available as Input Tax Credit (ITC) which helped in reduction of cascading effect of goods / services in value chain.Except these three, all other taxes of the previous Indirect Tax regime were creating cascading effect in the value chain as those taxes were not available as ITC to its purchaser. Notably, there was Central Sales Tax (CST) levied on inter-state movement of goods was also not available as ITC to the purchaser of the goods. Due to this businesses used to resort to purchase goods locally (i.e. within state) instead of inter-state purchase.
Role of Integrated Goods and Service Tax (IGST) under GST
- a) Central Goods and Services Tax Act, 2017; [the CGST Act]
- b) Integrated Goods and Services Tax Act, 2017; [the ITGST Act]
- c) Union Territory Goods and Services Tax Act, 2017; [the UTGST Act]
- d) Goods and Services Tax (Compensation to States) Act, 2017
Availability of ITC Utilisation against Output Tax Liability
- CGST ⇒ against CGST and balance if any, against IGST
- SGST ⇒ against SGST and balance if any, against IGST
- IGST ⇒ against IGST, then CGST and balance if any, against SGST.
- CGST - Rs.800/-
- SGST - Rs.600/-
- IGST - Rs.2900/- (collected from incoming Inter-state supply)
- CGST - Rs.1000/-
- SGST - Rs.800/-
- IGST - Rs.2200/-