Q 1. What is IGST?

Ans. “Integrated Goods and Services Tax” (IGST) means tax levied under the IGST Act on the supply of any goods and/ or services in the course of inter-State trade or commerce.

Q 2. What are inter-state supplies?

Ans. A supply of goods and/or services in the course of inter-State trade or commerce means any supply where the location of the supplier and the place of supply are in different States. (Section 3(1) and 3(2) of the IGST Act)

Q 3. How will the Inter-State supplies of Goods and Services be taxed under GST?

Ans. IGST shall be levied and collected by Centre on inter-state supplies. IGST would be broadly CGST plus SGST and shall be levied on all inter-State taxable supplies of goods and services. The inter-State seller will pay IGST on value addition after adjusting available credit of IGST, CGST, and SGST on his purchases. The Exporting State will transfer to the Centre the credit of SGST used in payment of IGST. The Importing dealer will claim credit of IGST while discharging his output tax liability in his own State. The Centre will transfer to the importing State the credit of IGST used in payment of SGST. The relevant information is also submitted to the Central Agency which will act as a clearing house mechanism, verify the claims and inform the respective governments to transfer the funds.

Q 4. What are the salient features of the draft IGST Law?

Ans. The draft IGST law contains 33 sections divided into 11 Chapters. The draft, inter alia, sets out the rules for determination of the place of supply of goods. Where the supply involves movement of goods, the place of supply shall be the location of goods at the time at which the movement of goods terminates for delivery to the recipient Where the supply does not involve movement of goods, the place of supply shall be the location of such goods at the time of delivery to the recipient In the case of goods assembled or installed at site, the place of supply shall be the place of such installation or assembly. Finally, where the goods are supplied on board a conveyance, the place of supply shall be the location at which such goods are taken on board.

Q 5. What are the advantages of IGST Model?

Ans. The major advantages of IGST Model are:

a. Maintenance of uninterrupted ITC chain on inter-State transactions;

b. No upfront payment of tax or substantial blockage of funds for the inter-State seller or buyer;

c. No refund claim in exporting State, as ITC is used up while paying the tax;

d. Self-monitoring model;

e. Ensures tax neutrality while keeping the tax regime simple;

f Simple accounting with no additional compliance burden on the taxpayer;

g Would facilitate in ensuring high level of compliance and thus higher collection efficiency. Model can handle ‘Business to Business’ as well as ‘Business to Consumer’ transactions.

Q 6. How will imports/exports be taxed under GST?

Ans. All imports/exports will be deemed as inter-state supplies for the purposes of levy of GST (IGST). The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed. Full and complete set-off will be available as ITC of the IGST paid on import on goods and services. (Section 2(c) of the IGST Act).

Q 7. IGST Act is very small with very few definitions and major part catering to settlement commissioner. Whether provisions in CGST or SGST Act will apply to IGST Act?

Ans. Yes, Section 27 of the IGST Act provides that various provisions as mentioned therein shall apply under IGST Act as they apply in relation to levy under the CGST Act.

Q 8. How will the IGST be paid?

Ans. The IGST payment can be done utilizing ITC or by cash. However, the use of ITC for payment of IGST will be done using the following hierarchy,-

o First available ITC of IGST shall be used for payment of IGST;

o Once ITC of IGST is exhausted, the ITC of CGST shall be used for payment of IGST;

o If both ITC of IGST and ITC of CGST are exhausted, then only the dealer would be permitted to use ITC of SGST for payment of IGST.

Remaining IGST liability, if any, shall be discharged using payment in cash. GST System will ensure maintenance of this hierarchy for payment of IGST using the credit

Q 9. How will the settlement between Centre, exporting state and importing state be done?

Ans. There would be settlement of account between the centre and the states on two counts, which are as follows‑

• Centre and the exporting state: The exporting state shall pay the amount equal to the ITC of SGST used by the supplier in the exporting state to the Centre.

• Centre and the importing state: The centre shall pay the amount equal to the ITC of IGST used by a dealer for payment of SGST on intra- state supplies.

The settlement would be on cumulative basis for a state taking into account the details furnished by all the dealer in the settlement period. Similar settlement of amount would also be undertaken between CGST and IGST account.

INDEX OF ALL FAQs ON GOODS AND SERVICE TAX

S. No.Title of the Post
1.

FAQs on Overview of Goods and Services Tax (GST)

2.

GST: FAQ on Levy of and Exemption from Tax

3.

GST- FAQs on Registration under Goods and Service Tax

4.

GST- FAQS on Meaning and Scope of Supply

5.

FAQs on Time of Supply under Goods and Service Tax (GST)

6.

FAQs on Valuation in Goods and Service Tax (GST)

7.

FAQs on Payment of Tax under Goods & Service Tax

8.

FAQs on Electronic Commerce under Goods and Service Tax

9.

FAQs on Job Work under Goods and Service Tax

10.

FAQs on Input Tax Credit under Goods and Service Tax

11.

FAQs on Concept of Input Service Distributor in GST

12.

GST- FAQs on Returns Process & matching of Input Tax Credit

13.

FAQs on Assessment and Audit under GST

14.

FAQs on Refunds under Goods and Service Tax (GST)

15.

FAQs on Demands & Recovery under Goods and Service Tax

16.

FAQs on Appeals, Review and Revision in GST

17.

FAQs on Advance Ruling under Goods and Service Tax

18.

FAQs on Settlement Commission under Goods and Service Tax

19.

FAQs on Inspection, Search, Seizure and Arrest under GST

20.

GST FAQs on Offences & Penalties, Prosecution & Compounding

21.

FAQs on IGST under Goods and Service Tax

22.

FAQs on Place of Supply of Goods and Service under GST

23.

FAQs on Frontend Business Process on GST Portal

24.

FAQs on Transitional Provisions under Goods and Service Tax

25.

Download Exhaustive FAQ on GST by CBEC

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Category : GST (2055)
Type : Articles (10773)
Tags : FAQs (190) goods and services tax (702) GST (292)