Integrated Goods And Services Tax Act 2017 (IGST Act)

Extent and commencement

This Act may be called the Integrated Goods and Services Tax Act, 2017. It shall extend to the whole of India including Jammu and Kashmir. It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

Some provisions of the IGST Act came into force through Notification No. 1/2017-integrated Tax dated 19.6.2017. Further, Notification No. 3/2017-integrated Tax was issued to make other provisions of the IGST Act applicable w.e.f. 1st July. Effectively, all provisions of this Act have become applicable from 1st July 2017.

Overview

Integrated Goods and Services Tax Act, 2017 (in short IGST Act) has been enacted to regulate levy and collection of tax on supply of goods or services or both taking place in the course of inter-State trade/ commerce. This act contains 11 Chapters, 33 Sections, and 8 Definitions. The IGST Act:

• Provides for levy of a single tax on all inter-State supplies (except alcoholic liquor for human consumption) at a rate recommended by the GST Council (not exceeding 40%)
• Provides for levy of tax on imports
• Provides for levy of tax on import of services under reverse charge mechanism
• Empowers the Central Government to grant exemptions
• Provides for determination of nature of supply
• Provides for determination of place of supply
• Provides for tax payment by a supplier of Online Information and Database Access or Retrieval Services (OIDAR)
• Enables apportionment of tax and settlement of funds on account of transfer of input tax credit between the Central Government and State Government
• Provides for application of certain provisions of the CGST Act 2017
• Provides for transitional transactions in relation to the import of services.

Features of IGST Act 2017

• Uninterrupted credit chain on inter-state transactions
• Simple accounting and no additional compliance burden on the taxpayer
• No substantial blockage of funds for the taxpayer as upfront payment of tax is not required
• Both ‘Business to Business’ as well as ‘Business to Consumer’ transactions can be managed in this model
• Self-monitoring model
• Ensures tax neutrality while keeping the GST regime simple
• Ensure a high level of compliance.

Amendments in IGST Act by Finance Act 2021

• in section 16, the authorized operations in SEZ Units/ developers have also been provided for eligibility of zero-rated supply.
• Facility to export the goods on payment of IGST and thereafter claim of refund of IGST payment has been restricted to specified persons.