The Inter-State supplies of goods and/or services will be the matter of IGST. Integrated Goods and Services Tax (IGST) which is equal to CGST and SGST is levied and collected on inter-state supply of goods and/or services under IGST Act.
Levy of the IGST tax specified under section 5 of the IGST Act, which envisage that:
(a) Applicability: IGST will be levied on all inter-state supplies of goods and/or services;
For example, D Ltd. supplier of machinery located in Delhi supplies the machinery to M Ltd. in Mumbai. Such Supply is inter state and wifi be subject to IGST.
(b) Valuation: At ad valorem basis on the value as determined under sec. 15 of the CGST Act.
(c) Prescribed rates: Rates of the tax will be notified by the Centre and State Government based on the principle specified by the GST Council.
(d) IGST on imported goods: The integrated tax on goods imported into India shall be:
• Valued, levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975,
• At the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962.
(e) Rate limited to 40%: The rates so notified shall however, not exceed 40% in any case.
(f) Non-applicability: GST will not be applicable on the alcoholic liquor for human consumption.
(g) IGST on petroleum products: The five petroleum products namely petroleum Crude, High speed diesel, Motor spirit (Petrol), Natural Gas, Aviation turbine fuel will be under the levy of GST from the date notified by government on the recommendation of the council.
(h) IGST in reverse charge: Categories of supply of goods and service9 would be notified by the Centre/States Government (on recommendation of council) on which recipient would be liable to pay GST on reverse charge basis. All the provisions of this act shall apply mutatis mutandis upon such person.
(i) IGST on purchase from unregistered supplier: The IGST in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
(j) IGST levy on e-commerce operator: The category of e-commerce operators will also be notified by the government on recommendation of GST Council for payment of IGST on services supplied through them and all provisions of this Act shall apply to them as if they are the person liable for payment of tax under this Act. In case e-commerce operator does not have physical presence in India, any person representing such e-commerce operator in India on behalf of such person shall be liable to pay tax. Even in case no person is representing an e-commerce operator in India, the e-commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and other compliances.