Levy and Collection of Tax Under IGST, Levy under Integrated GST. Levy of tax Under IGST, Collection of Tax Under IGST, Chapter III of the Model IGST Act provides for levy and collection of tax (IGST) vide section 5. Section 5 of the IGST Act, 2017 lays down the provisions of Levy and Collection of integrated goods and services tax on all inter-State supplies of goods or services or both. Few points to be noted include. Now Scroll down below n check more details for “Levy and Collection of Tax Under IGST (Integrated GST)”
Levy and Collection
It will be levied exception the supply of alcoholic liquor for human consumption
- Integrated tax on goods imported into India shall be levied and collected as per section 3 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 section 12 of the Customs Act, 1962
- The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis
- Integrated tax on the supply of petroleum crude, high speed diesel, motor spirit , natural gas and aviation turbine fuel shall be levied when notified by the Government on the recommendations of the Council
- The Government may, on the recommendations of the Council, by notification, specify categories of services, the tax on inter-State supplies of which shall be paid by the electronic commerce operator
- Under reverse charge, all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both
- It will be levied on the value determined under section 15 of CGST Act and not exceeding 40%
Introduction
The Constitution mandates that no tax shall be levied or collected by a taxing Statute except by authority of law. While no can be taxed by implication, a person can be subject to tax in terms of the charging section only.
This is the charging provision of the IGST Act. It provides that all inter-State supplies would be liable to IGST at rate recommended by the council and notified subject to a ceiling rate of 40%. The provision of this section is comparable to the provision under Section 9 of the CGST Act and Section 7 of the UTGST Act.
The levy is on all goods or services or both except alcoholic liquor for human consumption. Further, GST may be levied in supply of petroleum crude, high spirit diesels, motor spirit (petrol), natural gas and aviation turbine fuel with effect from the date notified by the Government on the recommendation of GST Council.
The levy of tax on supply of goods and / or services is in three parts – (i) in the hands of the supplier and (ii) in the hands of the recipient of goods / services under reverse charge mechanism and, (iii) in case of specified services, in the hands of electronic commerce operator
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Analysis
In terms of Section 2(24) of the Act, any words or expression which are used in this Act, but are not defined should be assigned the meaning as given to such words or expressions in the CGST Act, the UTGST Act, and the GST (Compensation to States) Act.
With specific reference to this Section, the following words / expressions would be relevant.
- Supply
- Inter-State supply
- Goods
- Services
- Taxable person
The meaning to the expression ‘inter-State supply’ can be understood from Section 7 of this Act. However, the meaning of ‘supply’ and ‘taxable person’ should be borrowed from the CGST Act. Reference may be made to the CGST Act for an in-depth understanding of such expressions and words.
Levy of tax: Every inter-State supply will be liable to tax, if:
- (i) There is a Supply either of goods or services or both, even when a supply involves goods or services or both the law provides that such supply would be classifiable only as goods or services in terms of Schedule II of the Act.
- (ii) The supply is an inter-State supply – viz. ordinarily, the location of the supplier and the place of supply are in different States. (Refer Section 7 of the IGST Act to understand the meaning of inter-State supply);
- (iii) The tax shall be payable by a ‘taxable person’ as explained in Section 2(107) read with Section 22 and Section 24 of the CGST Act.
Supply: Refer discussion under Section 7 the CGST Act for a detailed understanding of the expression ‘supply’. Additionally, the comments relating to ‘composite supply’ and ‘mixed supply’ will equally apply for supplies taxable under IGST Act.
Tax shall be payable by: The tax shall be payable by a ‘taxable person’ as defined under Section 2(107) read with Section 22 and Section 24 of the CGST Act. Broadly, a taxable person is one who is registered or who is required to be registered under the GST law. Please refer to the discussion under the CGST Act for a thorough understanding of this concept.
Tax payable: Every inter-State supply falling under Section 7 of the IGST Act will attract IGST, if it gets covered by section 5. However, all transactions covered within definition of supply in the course of inter state trade or commerce within meaning of section 7 does not mean that it is always subject to levy of GST unless it falls in section 5 i.e. charging section.
Tax on import of goods: This Act provides that IGST shall be levied on import of goods in terms of Section 3 of the Customs Tariff Act, 1975. It implies that on such importation of goods IGST will be payable in addition to the Basic Customs Duty (BCD). The proviso to Section 5(1) of the IGST Act also clarifies that the value and point at which IGST would be payable will be determined in accordance with Section 12 of the Customs Act, 1962.
Rate and value of tax: The rate of tax will be notified separately, but shall not exceed 40%, and the value of supplies would be as determined under Section 15 of the CGST Act.
Applicability in respect of e-commerce operators: Refer discussion under section 9(5) of the CGST Act for an understanding of the applicability of this provision for e-commerce operators.
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