AN OVERVIEW OF IGST ACT

OUT OF 193 COUNTRIES:

COUNTRIES WITH COUNTRIES WITHOUT

NATIONAL VAT / GST NATIONAL VAT / GST

160 33
 TYPES OF TAXATION

• ORIGIN-BASED • DESTINATION-
BASED
(TAX ACCRUES TO THE (TAX ACCURES TO THE
STATE WHERE THE STATE WHERE THE
SUPPLY ORIGINATES) SUPPLY IS CONSUMED)
 PURPOSE OF IGST ACT

•TO MAINTAIN
INTEGRITY OF
INPUT CREDIT
CHAIN.
•TO TAX IMPORT
OF SERVICES.
 SECTION 5 OF IGST ACT

LEVY OF TAX NOT

INTER-STATE INCLUDES -
EXCEEDING 40% ON
SUPPLY OF ALL GOODS
• IMPORT OF SERVICES
AND / OR SERVICES
AND
MADE IN THE COURSE
• EXPORT OF SERVICES
OF INTER-STATE TRADE
OR COMMERCE
ARE ALL GOODS COVERED BY IGST?
NO. ALCOHOL FOR
HUMAN CONSUMPTION IS
BEYOND SCOPE OF IGST IN
VIEW OF ARTICLE 366(12A) OF
CONSTITUTION OF INDIA. “goods and service tax”
means any tax on supply of
goods, or services or both
except taxes in the supply
of the alcoholic liquor for
human consumption
 WHAT ABOUT PETROLEUM PRODUCTS?

- PETROLEUM CRUDE
- PETROL
- DIESEL
- NATURAL GAS
- AVIATION TURBINE
FUEL
 WHAT ABOUT ELECTRICITY?

SALE OF ELECTRICITY
IS STILL FIGURING IN
LIST-II (STATE LIST)
UNDER THE
C0NSTITUTION OF
INDIA AND WILL
THEREFORE
CONTINUE TO BE
TAXED BY THE STATES
COMBINATION OF GOODS / SERVICES
COMPOSITE SUPPLY:
SUPPLY CONSISTING OF TWO
OR MORE TAXABLE SUPPLIES
OF GOODS OR SERVICES OR
BOTH, OR ANY COMBINTION
THEREOF, WHICH ARE
NATURALLY BUNDLED AND
SUPPLIED IN CONJUNCTION
WITH EACH OTHER IN THE
ORDINARY COURSE OF
BUSINESS, ONE OF WHICH IS
A PRINCIPAL SUPPLY.
COMBINATION OF GOODS / SERVICES

MIXED SUPPLY:
TWO OR MORE
INDIVIDUAL SUPPLIES OF
GOODS OR SERVICES, OR
ANY COMBINATION
THEREOF, MADE IN
CONJUNCTION WITH EACH
OTHER FOR A SINGLE
PRICE, OTHER THAN A
COMPOSITE SUPPLY.
 SECTION 7 OF CGST ACT
(1) Supply includes—

(a) all forms of supply of

goods and/or services
such as sale, transfer,
barter, exchange, license,
rental, lease or disposal
made or agreed to be
made for a
consideration by a
person in the course or
furtherance of business.
 SUPPLY INCLUDES-

(b) importation of
services, for a (c) a supply
consideration specified in
whether or not in Schedule I, made
the course or or agreed to be
furtherance of made without a
business, and consideration.
SCHEDULE-I:

1. Permanent transfer / disposal of business assets where

input tax credit has been availed on such assets.

2. Supply of goods or services between related persons, or

between distinct persons as specified in Section 25, when
made in the course or furtherance of business.

3. Supply of goods by agent to principal and principal to agent

4. Import of services by a taxable person from a related

person or any of his other establishment outside India, in the
course or furtherance of business.
 Section 2(17) of CGST Act:
Business includes
any trade,
commerce,
manufacture,
profession, vocation,
adventure or wager
or any similar
activity, whether or
not it is for a
pecuniary benefit.
 BUSINESS INCLUDES…
• ANY ACTIVITY, WHETHER OR NOT THERE IS VOLUME,
FREQUENCY, CONTINUITY OR REGULARITY OF SUCH
TRANSACTION.
• PROVISION BY A CLUB, ASSOCIATION, SOCIETY, OR ANY
SUCH BODY OF THE FACILITIES OR BENEFITS TO ITS
MEMBERS.
• SERVICES SUPPLIED BY A PERSON AS A HOLDER OF AN
OFFICE WHICH HAS BEEN ACCEPTED BY HIM IN THE
COURSE OR FURTHERANCE OF HIS TRADE, PROFESSION OR
VOCATION.
• SERVICES PROVIDED BY A RACE CLUB BY WAY OF
TOTALISATOR OR A LICENCE TO BOOK MAKER IN SUCH
CLUB.
 Section 7 of IGST Act:

Inter-state supply
means a supply
where the location
of the supplier and
the place of supply
are not within the
same State or Union
Territory.
 INTER-STATE SUPPLY INCLUDES
• IMPORT / EXPORT OF
GOODS / SERVICES.

• SUPPLIES TO SEZ DEVELOPER

/ UNIT, FROM A PERSON
OUTSIDE SEZ, EVEN WITHIN
THE SAME STATE.

• SUPPLIES FROM SEZ

DEVELOPER / UNIT, TO A
PERSON OUTSIDE SEZ, EVEN
WITHIN THE SAME STATE.
• SUPPLIES MADE TO AN
INTERNATIONAL TOURIST.
 ELECTRONIC CREDIT LEDGER
• IGST will be used for paying
IGST, then CGST and finally
SGST.
• CGST will be used for paying
CGST and then IGST.
• SGST will be used for paying
SGST and then IGST

CGST AND SGST CANNOT BE

USED FOR PAYING EACH
OTHER
 ORDER OF PAYMENT
• First, self-assessed tax and
other dues related to
returns of previous tax
periods
• Next, self-assessed tax and
other dues related to the
return of the current tax
period
• Then, any other amount
payable under the Act or
rules including those
determined under Sections
66 and 67 of the CGST Act
(adjudicating process).
 Section 16: zero-rated supplies

“zero rated supply” means any

of the following taxable supply
of goods and/or services,
namely –

• (a) export of goods and/or

services; or
• (b) supply of goods and/or
services to a SEZ developer or
an SEZ unit.
 Zero-rated supplies (contd…)

Subject to provisions of
sub-section (5) of section
17 of the CGST Act, 2016,
credit of input tax may be
availed for making zero-
rated supplies,
notwithstanding that such
supply may be an exempt
supply.
 Section 2(6) of IGST Act:
“export of services” means the
supply of any service when:
(a) the supplier of service is located
in India,
(b) the recipient of service is located
outside India,
(c) the place of supply of service is
outside India,
(d) the payment for such service has
been received by the supplier of
service in convertible foreign
exchange, and
(e) the supplier of service and
recipient of service are not
merely establishments of a
distinct person in accordance
with explanation 1 of section 5;
 ZERO-RATED SUPPLY: Two options
• SUPPLY UNDER BOND
WITHOUT PAYMENT OF
IGST AND CLAIM
REFUND OF
UNUTILIZED INPUT TAX
CREDIT ; OR

• SUPPLY ON PAYMENT
OF IGST AND CLAIM
REFUND OF IGST PAID
ON GOODS AND
SERVICES PAID ON
SUCH OUTWARD
SUPPLY.
 ADVANCE RULING

Sections 95 to 106
of CGST Act:
•Advance Ruling
(AAR, AAAR - There
is an appeal
provision; earlier no
statutory appeal)
 ADVANCE RULING ON WHAT?
(a) classification of any goods or services or both;
(b) applicability of a notification issued under the provisions of this
Act;
(c) determination of time and value of supply of goods or services or
both;
(d) admissibility of input tax credit of tax paid or deemed to have
been paid;
(e) determination of the liability to pay tax on any goods or services
or both;
(f) whether applicant is required to be registered;
(g) whether any particular thing done by the applicant with respect
to any goods or services or both amounts to or results in a supply
of goods or services or both, within the meaning of that term.
 ADVANCE RULING IS BINDING:

(a) on the applicant who had

sought it in respect of any
matter referred to in sub-
section (2) of section 97
for advance ruling;
(b) on the concerned officer
or the jurisdictional
officer in respect of the
applicant.
 Section 19: Wrong payments
• If a person wrongly
pays IGST instead of
CGST/SGST, he will be
allowed refund subject
to conditions to be
prescribed.

• If a person wrongly
pays CGST / SGST
instead of IGST, no
interest liability is
fastened to him.
Section 15: refund to international tourist

The IGT paid by

a tourist leaving
India shall be
refunded the tax
paid on such
goods taken by
him out of India,
subject to
conditions
prescribed.
 SECTION 15 OF IGST ACT:

TOURIST MEANS A
PERSON NOT
NORMALLY RESIDENT
IN INDIA, WHO ENTERS
INDIA FOR A STAY OF
NOT MORE THAN SIX
MONTHS FOR
LEGITIMATE NON-
IMMIGRANT
PURPOSES.
HOORAY!

BREAK