IGST Full Form

IGST full form is Integrated Goods and Services Tax which is levied on the exchange of goods and services between states. It falls part of the GST enforced by the Government of India in 2017. IGS tax is collected by the Central Government and further distributed among states and union territories. The integrated GST works on a basic principle; the supplying state offers a credit of SGST (State Goods and Services Tax) which is levied at the time of procuring IGST to the center, the recipient needs to avail of the credit of IGST when disclosing tax liability to their respective state. 

What is IGST Full Form?

IGST full form is Integrated Goods and Services Tax, and is imposed on the interstate exchange of goods and services. The following four types of supplies come under the IGST, and they include

• Supplies made to international countries
• Import of goods and services within Indian territory
• Supplies made to or from Special Economic Zones or SEZs
• Export of goods or services or both

There are three components of IGST to ensure a flexible taxation system. Those three components are:

• CGST: Central Goods and Services Tax
• IGST: Integrated Goods and Services Tax
• SGST: State Goods and Services Tax

If you are a trader, and confused about IGST, its benefits, and the right way to pay them, then read our article to get a fair idea. 

Highlights on IGST

IGST Explanation Through an Example

If yours is an export-import business, then understanding the nitty-gritty of Integrated Goods and Services Tax seems essential for you. Well, the entire taxation process is a bit complex so, we will explain it to you through a simple scenario. Before we begin, let’s learn the IGST calculation method. IGST is calculated with a formula which is IGST= CGST+ SCGST

Scenario 1:

Interstate: Suppose Rakesh owns a business of cashew nuts in Delhi and he wishes to sell them in Rajasthan or any other state, then he has to pay an IGST of 5%. Traders will collect it in Rajasthan and further pay it to the government.

Intrastate: In case Rakesh wants to export cashew nuts within the territory of Delhi, then he needs to pay a CGST and SGST of 2.5% which will go to the central government.

Characteristics of IGST

To gain a better insight into the working of Integrated Goods and Services Tax (IGST full-form), you need to discover some of its characteristics. Please check the below list

• It helps in streamlining the functions of SGST and CGST under the UTGST act.
• Suppliers who want to supply goods to the interstate have to register under GST compliance.
• IGST ensures a swift flow of input credit chains on the interstate exchange of goods and services.
• The inter-state vendor need not require paying tax fortnight
• IGST works on a self-monitoring model
• For settling interstate tax amounts, the state government have to only compensate the central government

Important Details to Remember About IGST

As IGST is a significant requirement when transferring goods and services from one state to another or within states, there are certain relevant details one needs to learn about IGST to stay away from any legal obligations.

• The Integrated Goods and Services Tax is a combination of CGST and SGST which means both state and central governments have their share in the IGST.
• The places where IGS tax is applicable include Special Economic Zones, EOU supply, inter-state supply and import and export of goods and services.
• The final tax revenue is earned by the states who receive the supply of goods and services.

A Dive into the IGST Legislation

The Integrated Goods and Services Tax Act was enforced by the central government in 2017. The primary objective of this act is to make the taxation system for inter and intrastate exchange smooth and easy. 

This taxation act was implemented across India including the state of Jammu and Kashmir. Its initiation helped in making the B2B and B2C trade effective and faster. With IGST, the government can levy, administer and collect taxes on export and import operations. The IGST legislation contains 33 sections, 8 definitions and 11 chapters. 

What is the Integrated Goods and Services Tax (IGSTfull form) Refund Policy?

If you are paying the IGS tax for the first time, you need to discover an important concept associated with this tax which is refund. A similar policy is related to GST too. IGST refund is applicable in two given situations

• Tax payers who have remitted their payments to any other tax head like CGST or SGST rather than IGST are eligible for a refund if they re-deposit the payment in the respective tax head.
• Refund is also available for foreign tourists who visit the country for a period of six months and not more than six months can receive a refund on IGST.

How to Track the IGST Refund Status?

Below are the steps for tracing the status of your IGST refunds.

• Visit the GST portal
• Enter required details
• Choose the refunds option from the services tab
• Select track status from drop-down menu
• Select financial year
• Tap the search button
• You will be directed to a page mentioning the result

When is IGST Applicable?

To check whether IGS tax applies to a given scenario or not, you need to assess certain factors that are given below

• Outstation supply of goods and services: IGS tax is levied when a business supplies its products and services to a different state, the business must pay Integrated Goods and Services Tax. Sellers collect IGST from the buyer.
• Intrastate supply of goods and services: When the buyer and seller export and import goods or services within the same state, then the seller needs to levy SGST and CGST from the buyer. 

It is mandatory to pay your IGST whose full form is Integrated Goods and Services Tax on time as it falls part of your responsibility as an Indian citizen.Suppose you miss paying the tax, a severe penalty will be levied, and in some cases, legal action can be taken against you.