accounting services

What Is Integrated Goods and Service Tax Know About It?   


jauhar khan 
@jauhar123 | Posted 01 Jul. 2019


The full form of IGST under GST law isThe Integrated Goods and Service Tax Model can take ‘Business to Business’ and ‘Business to Consumer’ transactions into an account. It is described as IGST in the Act of 2017.



The scope of IGST Model gives purpose to the GST Act of which IGST is one of the components. The IGST Act defines that Centre would levy IGST which would be CGST plus SGST on all inter-State transactions of taxable goods and services with proper provision for consignment or stock transfer of goods and services. If you have any choirs on these GST you can visit best GST consultant in Hyderabad to clarify the problems you have.


The dealer making supply outside the state will pay IGST on value addition after adjusting available credit of CGST,  IGST and SGST on his purchases. And the exporting State will carry to the Centre the credit of SGST used in payment of IGST.


On the other hand, the Importing seller will claim credit of IGST while discharging his output tax responsibility in his State. The Centre will then give to the importing State the credit of IGST used in payment of SGST.


The necessary information will also be submitted to the Central Agency, which will act as a clearinghouse mechanism, check the claims and inform the respective governments to transfer the funds.


Salient features of IGST Act 2017:

  • Duration of uninterrupted ITC chain on inter-State transactions.

  • No demand to pay tax upfront or substantial blockage of funds for the inter-State seller or buyer.

  • No part of a refund of taxes paid in exporting State, as ITC is used up while paying the tax.

  • Self-monitoring model.

  • The activity of streamlining is restricted to inter-State dealers and Central and State Governments.

  • Should be capable of streamlining their processes expeditiously.

  • As Dealers making interstate supplies will be registered, and communication with them will be by email, the compliance level will improve substantially. 

  • The IGST Model can take ‘Business to Business’ as well as ‘Business to Consumer’ transactions into an account.


Advantages of IGST Model:

The significant benefits of IGST Model are:


  • Maintenance of constant ITC chain on inter-State transactions.

  • No upfront payment of tax or real blockage of funds for the inter-State seller or buyer.

  • No refund interest in exporting State, as ITC is used up while giving the tax.

  • Self-monitoring model.


  • Level of computerization is restricted to inter-State dealers, and Central and State Governments should be capable of computerizing their processes expeditiously.

  • As each inter-State dealer will be e-registered, an agreement with them will be by email, the compliance level will develop substantially.


Central Government will levy IGST (which would be CGST plus SGST) on all inter-State transactions of taxable goods and services with proper provision for consignment or stock transfer of products and services. The inter-State dealer will pay IGST on value addition after adjusting available credit of CGST, IGST and SGST on his purchases. 


The Exporting State will give the Centre the credit of SGST used in payment of IGST. The Importing seller will claim credit of IGST while discharging his output tax account in his State. The Centre will shift to the importing State the credit of IGST used in payment of SGST.