What does IGST mean in TAX
IGST (International Goods and Service Tax) is a comprehensive tax levied on the supply of goods and services between different states in India. It is a value-added tax (VAT) that has been implemented under the Goods and Services Tax (GST) regime.
IGST meaning in Tax in Business
IGST mostly used in an acronym Tax in Category Business that means International Goods and Service Tax
Shorthand: IGST,
Full Form: International Goods and Service Tax
For more information of "International Goods and Service Tax", see the section below.
Meaning of IGST
IGST stands for International Goods and Service Tax. It signifies a tax that is levied on interstate transactions of goods and services. Unlike other GST components, IGST is not credited to the state where the goods are consumed but instead to the central government.
Key Features of IGST
- Levied on interstate supply of goods and services
- Payable by the supplier of goods or services
- Credited to the central government
- Rate varies based on the nature of goods or services
- Facilitates seamless movement of goods across states
Benefits of IGST
- Eliminates Cascading Effect: IGST removes the cascading effect of multiple taxes, as it is levied only once on the final product.
- Promotes Inter-State Trade: It encourages trade between different states by simplifying tax procedures and reducing compliance costs.
- Simplifies Tax Administration: IGST streamlines tax administration by consolidating multiple taxes into a single levy.
Calculation of IGST
IGST is calculated as follows:
IGST Amount = (Taxable Value x IGST Rate) - (Input Tax Credit)Essential Questions and Answers on International Goods and Service Tax in "BUSINESS»TAX"
What is IGST?
IGST (Integrated Goods and Services Tax) is a comprehensive indirect tax levied on the supply of goods and services within India. It is a combination of the Central GST (CGST) and State GST (SGST) and is applicable on inter-state transactions.
What are the rates of IGST?
IGST rates vary depending on the nature of the goods or services supplied. The most common rates are 5%, 12%, 18%, and 28%. Some items are exempt from IGST, while certain items may attract a higher rate of 28% plus applicable cess.
Who is liable to pay IGST?
Any person who supplies goods or services within India is liable to pay IGST. This includes manufacturers, traders, distributors, and service providers.
How is IGST calculated?
IGST is calculated as a percentage of the transaction value (taxable value). The taxable value is the total amount charged for the goods or services, including any discounts or incentives.
How is IGST paid?
IGST is paid online through the GST portal. Businesses can file their returns and make payments electronically.
What are the benefits of IGST?
IGST has simplified the indirect tax system in India by replacing multiple state and central taxes. It has reduced tax evasion, improved transparency, and facilitated inter-state trade.
Final Words: IGST plays a crucial role in the GST regime by facilitating interstate transactions and promoting economic integration within India. It simplifies tax administration, eliminates cascading effects, and encourages inter-state trade. Understanding the concept of IGST is essential for businesses involved in interstate supply of goods and services.
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