ABSTRACT
This paper will examine the key facets associated with the Integrated Goods and Services Tax 2017. Essentially, when we discuss what Integrated Goods and Services Tax truly is, we discover that it constitutes a major reform primarily in the arena of indirect taxes; notably, multiple taxes enforced and gathered by the Centre and States would be substituted by a singular tax termed Goods and Services Tax (GST), which is a multi-stage value-added tax on the consumption of goods, services, or both.
The fundamental concept underlying the IGST is that it is imposed when there is an inter-state transfer of goods and services, and it serves as one of the three elements of Goods and Services Tax. The Central Government introduced GST in 2017, with the primary objective of consolidating all the diverse indirect taxes into a single tax. The simplification of the indirect taxation system was the main motivation for implementing GST concerning the demand and supply aspects since, as we know, India functions as a federal nation with multiple governance levels; financially, both central and state governments hold the authority to collect and impose taxes, and now we will explore all these aspects in detail.
INTRODUCTION
When we think about the concept of Integrated Goods and Services Tax or IGST, we notice that it numerically equals CGST + SGST. The application of IGST can be understood in the manner that occurs when goods are transported from New Delhi to Agra. Certain questions emerge in our minds, and they can be as follows- .Does this imply that inter-state transfers are costlier than intra-state transfers?
.Which state is responsible for paying the tax?
.Which state receives the tax?
.Does the central government have any involvement in this?
Prior to the implementation of GST, there were multiple taxes such as service tax, central excise, and state value-added tax (VAT), and more significantly, GST is a single tax divided into three categories—IGST, SGST, and CGST—based on whether the transaction is intrastate or interstate. In this segment, we will learn about what IGST actually is, and the answer is that IGST is the category of GST that pertains to taxes imposed on all interstate supplies of goods and services, with the tax being divided between the central and state governments, while exports are zero-rated.