When IGST is Applicable?

Hi,

Before understanding when IGST is applicable? Let us first understand the fact that depending on whether the transaction is intrastate or interstate, the central government will collect CGST, SGST, or IGST.

It should be noted that the GST is a destination-based tax, meaning that it is collected by the state where the goods are consumed rather than the state where they are created. Unlike in the past, when there were various taxes such as Central Excise, Service Tax, and State VAT, there is only one tax under GST, with three components: CGST, SGST, and IGST.

To decipher when is IGST applicable? You will have to know that IGST, which will be governed by the IGST Act, is a tax levied on all inter-state supplies of goods and/or services under the GST. In both circumstances of import into India and export from India, the IGST will apply to any supply of goods and/or services.

1. Exports would be zero-rated under the IGST.

2. The central and state governments will split the tax burden.

Consider the case of Pramod, a Maharashtra businessman who sold items for Rs. 200,000 to Amir, a Gujarat businessman. The GST rate is 18%, which includes the IGST rate of 18%. The dealer must charge Rs. 36,000 as IGST in this situation. This IGST will be directed to the Center.

To conclude my answer on when IGST is applicable? I would like to say that when the provider and the place of supply are in different states, this is referred to as inter-state supply. The transaction is also presumed to be Inter-State when goods or services are exported or imported, or when products or services are supplied to or by a SEZ unit. A seller must collect IGST from the buyer in an interstate transaction.

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