Different types of taxes are the main source of revenue of a country. In India, State and Central Government has wide power to levy tax on various services and goods that consolidates the economic growth in the revenue. Four main types of taxes in India are SGST where State Government levies tax on goods and services in a State, CGST where Central Government tax is imposed on Goods and Services, UGST where Union territories taxes imposed and IGST denoting Integrated Goods and services Tax. Through the enactment of Integrated Goods and Services Act 2017 the Central Government is empowered with the power to levy tax on interstate supply of goods and services or on any other matter connected to such supplies between States.
The IGST Act is a concise act with 25 sections elaborated in 9 chapters came into force on 12th April 2017 through extra ordinary Gazette notification. The objective of the act is to levy tax not only in supply of goods and services interstate but also for the goods and services exported and imported subject to the provisions of the Act.
Chapter 2 of the act states the appointment of officers to collect tax in accordance with the act and on any exceptions on Central Government notification. Chapter three states the applicability of section 15 of Central goods and services act on goods and services except on liquor and alcohol and section 3 of Customs Tariff Act 1975 on imported goods or services. Section 6 deals with the exemption of tax on goods and services only if it is necessary on the interest of general public through special order notification and on the recommendation of the council not violating any provisions of the act.
The nature and conditions of interstate supply is detailed in Chapter four as location of the supplier and the supply is between States, states and union territory is determined as interstate trade and commerce of goods and services as per the Act. According to section 8 any supply between location of supplier and place of supply is within a State or Union territory is considered as intra State supply. Chapter 5 deals with the import and export of goods and services. Section 13 states the supply of goods and services outside India where there is a physical supplier and recipient.
Section 14 enumerates the online portal of suppliers and recipients where the online data and information is available and also a retrievable data base of supplier, recipient and goods and services supplied or received. A single online registration is mandatory on a simplified notified registration scheme by the Government. Chapter seven deals with the refund to tourist on IGST subject to terms and conditions.
Chapter 7 deals with the special feature of the act termed as “zero rated supply” where the supply is done on special economic zone or special economic zone developer. Any registered person making zero rated supply is eligible for refund, subject to Section 54 Central Goods and Services Act.
Chapter 8 deals with apportionment of settlement and funds and Chapter 9 deals with miscellaneous provisions.
The IGST Act is an indispensable act in the economic arena of the country where the tax imposed on interstate supplies has uniformity under the central government.