IGST Full Form
by Yogi P - August 20, 2023
What is the full form of IGST?
IGST full form is the Integrated Goods and Services Tax. IGST falls under the GST category and pertains to the taxation of goods and services involved in interstate transactions, including purchases, supplies, and imports of taxable goods and services. The collection of IGST is managed by the Central Government and is subsequently distributed among the respective states.
When goods or services move from one state to another, IGST comes into play. The tax collected is then distributed between the central and state governments, with the settlement occurring between the state government and the central government, rather than between multiple state governments.
Characteristics of IGST
IGST is governed by the GST Act, under which the Centre levies IGST, which is a combination of Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST), on all interstate transactions of taxable supplies, as per the IGST Act. The tax levied by the Central Government is then shared between the union and the states based on the provisions outlined in the legislation passed by the Parliament, often on recommendations from the Goods and Services Tax Council.
Key features of IGST include:
- Valid for interstate transactions of goods and services.
- The consuming state receives the SGST component of IGST Tax.
- Maintains transparency in the input tax credit chain for interstate supplies.
- Replaced the earlier Central Sales Tax (CST) Act, 1956.
- Also applicable to the import of goods and services into India, where any movement of products or services during the import process falls under the scope of IGST liability.
IGST plays a crucial role in streamlining taxation for interstate transactions and imports, ensuring uniformity and transparency in the distribution of taxes between the central and state governments.
