Introduction: The Integrated Goods and Services Tax (IGST) is a tax on inter-state supply of goods and services in India, initiated on July 1, 2017, under the GST reform.

What is IGST? IGST is levied when goods or services are moved between states. Collected by the central government, the tax is distributed to states or Union Territories in India. It simplifies taxation by removing cascading tax effects, aims for a transparent system, and ensures fair tax revenue distribution between central and state authorities, fostering a common market for unhindered trade.

Implementation of CGST, SGST, and IGST: GST has revamped tax administration, replacing older taxes like VAT and Service Tax. Comprising CGST (central levy), SGST (state levy), and IGST (for inter-state supplies), GST harmonizes tax rates nationwide and simplifies collection procedures.

Understanding IGST: The IGST Act governs the inter-state sales of goods and services in India, administered by the central government. Tax on exports is zero-rated, with revenue divided between central and state governments.

Key Features of IGST: IGST is applied to inter-state transactions, merging CGST and SGST into a single levy. The central government collects it but shares the revenue with states, promoting a barrier-free market, transparency, and economic growth.

IGST Calculation Example: If ASG Ltd. in Tamil Nadu sells Rs. 10 lakhs goods to a Karnataka dealer, they will levy IGST since it's inter-state. Say CGST and SGST are each 9%, the IGST rate will be 18%. Thus, IGST will be Rs. 1,80,000 (18% of 10,00,000). If the dealer resells to Maharashtra for Rs. 15 lakhs, IGST of Rs. 2,70,000 applies (18% of Rs. 15 lakhs), but they can claim Rs. 1,80,000 as input tax credit, paying only Rs. 90,000.

Tax Revenue Distribution: IGST revenue, from the Tamil Nadu manufacturer to the Karnataka dealer, is shared between the central and Karnataka governments. Further transactions see similar splits, ensuring no double taxation on inter-state deals.

IGST Considerations: Implementation requires focus on documentation and timelines. States enjoy a share of accumulated IGST, and eligible refunds are available, particularly in exports, with businesses claiming input tax credits.

GST Rate Determination: The GST Council, comprising central and state government reps, sets GST rates, reviewing them periodically based on revenue needs, economic conditions, and stakeholder feedback. Rates are categorized into 5%, 12%, 18%, and 28%, with some exemptions or lower rates for specific goods and services.

IGST Refunds: Exporters can claim an IGST refund by submitting shipping bills and GST invoices to authorities, subject to conditions and timelines for processing.