What does IGST mean in TAX
IGST (Integrated Goods and Services Tax) is a comprehensive tax levied on the supply of goods and services across different states in India. It was introduced as part of the Goods and Services Tax (GST) regime, which replaced multiple indirect taxes previously imposed by the central and state governments.
IGST meaning in Tax in Business
IGST mostly used in an acronym Tax in Category Business that means Integrated Goods and Services Tax
Shorthand: IGST,
Full Form: Integrated Goods and Services Tax
For more information of "Integrated Goods and Services Tax", see the section below.
Meaning of IGST in BUSINESS
IGST is a value-added tax that is charged on the sale or purchase of goods and services from one state to another. It is applicable to both inter-state and intra-state transactions, but its primary purpose is to eliminate the cascading effect of taxes and promote seamless movement of goods across India.
Calculation of IGST
IGST is calculated as the difference between the Central GST (CGST) and State GST (SGST) rates applicable to a particular transaction. The IGST rate is typically equal to the combined CGST and SGST rates.
For example, if the CGST rate is 9% and the SGST rate is 9%, the IGST rate would be 18%.
Payment of IGST
Businesses registered under GST are responsible for paying IGST on their inter-state transactions. The payment can be made through the GST portal using various payment modes such as net banking, credit card, or debit card.
Benefits of IGST
- Eliminates cascading effect of taxes: IGST prevents the accumulation of taxes at each stage of the supply chain, reducing the overall tax burden on businesses.
- Promotes seamless flow of goods: By eliminating state borders as barriers, IGST facilitates the free movement of goods across India, fostering economic growth.
- Simplifies tax compliance: The GST regime, including IGST, simplifies tax compliance for businesses by consolidating multiple taxes into a single system.
- Reduces tax evasion: The GST portal's robust tracking mechanism helps prevent tax evasion and ensures transparency in tax payments.
Essential Questions and Answers on Integrated Goods and Services Tax in "BUSINESS»TAX"
What is IGST?
IGST stands for Integrated Goods and Services Tax. It is a comprehensive indirect tax levied on the supply of goods and services within India. IGST is applicable to all inter-state transactions and imports into India.
Who is liable to pay IGST?
Any person who supplies goods or services in the course of inter-state trade or commerce or imports goods into India is liable to pay IGST.
What is the rate of IGST?
The rate of IGST is determined by the GST Council and varies depending on the goods or services being supplied. The rates range from 0% to 28%.
How is IGST collected?
IGST is collected by the Central Government through the Goods and Services Tax Network (GSTN). Taxpayers are required to file returns and make payments through the GSTN portal.
What are the benefits of IGST?
IGST has several benefits, including:
- Elimination of cascading effect of taxes (tax on tax).
- Seamless flow of goods and services across state borders.
- Reduction in compliance burden for businesses.
- Increased transparency and accountability in tax administration.
Final Words: IGST is a crucial component of the GST regime in India, playing a significant role in simplifying tax compliance, reducing the tax burden, and promoting economic growth through seamless inter-state trade. Its implementation has brought about a transformative change in the Indian taxation system, paving the way for a more efficient and integrated economy.
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