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Levy and Collection of Tax Under IGST, Levy under Integrated GST

Levy and Collection of Tax Under IGST, Levy under Integrated GST. Levy of  tax Under IGST, Collection of Tax Under IGST, Chapter III of the Model IGST Act provides for levy and collection of tax (IGST) vide section 4. Section 4 is the charging section for levy of IGST corresponding to section 6 of CST Act, 1956 dealing with liability to tax on inter-state sales. Now Scroll down below n check more details for “Levy and Collection of Tax Under IGST (Integrated GST)”

Levy and Collection of Tax Under IGST

Levy and Collection of Tax Under IGST

Levy and Collection

(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both; except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 of the Central Goods and Services Tax Act and at such rates, not exceeding forty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person:

Provided that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962.

(2) The integrated tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council.

(3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both 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.

(4) The integrated tax 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.

(5) The Government may, on the recommendations of the Council, by notification, specify categories of services, the tax on inter-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services:

Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax:

Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.

For the purpose of charging IGST, following points are important –

  • (i) Tax to be levied shall be called IGST
  • (ii) IGST shall be levied on all supplies of goods and / or services made in course of inter-state trade on commerce
  • (iii) Rate of IGST shall be as per Schedule to the Act (yet to be prescribed)
  • (iv) IGST shall be collected in the prescribed manner for which rules shall be prescribed.
  • (v) IGST shall be payable by every taxable person. As per IGST Act, who is a taxable person is defined in section 9 of CGST Act, i.e., a person who carries on any business at any place in India and who is registered or required to be for payment of tax.
  • (vi) Payment of IGST shall be made by service receiver in cases where it is notified that IGST is payable under reverse charge basis. In such cases, service receiver shall be treated as if he is person liable for paying IGST in relation to such service.
  • (vii) There will be certain exemptions subject to conditions if any, in relation to supply of specified goods or service which or services which will be specified in Schedule to Act, i.e., on such supplies, no tax shall be payable.

It may be noted that sub-section (1) on levy of IGST shall be subject to provisions of sub-section (3) and (4) as these are over riding provisions.

Sub-section (3) which provides for payment of IGST under Reverse Charge Mechanism (RCM) provides that reverse charge shall apply subject to the following –

  • (i) GST Council shall have to recommend the RCM.
  • (ii) Central Government shall notify the RCM by way of a notification after GST Council has recommended
  • (iii) RCM may be notified for specified categories of supplies of goods and / or services
  • (iv) In RCM, tax shall be paid by the person receiving such goods and/ or services
  • (v) In RCM, all the provisions of IGST Act shall apply to such person as if he is the person liable for paying the tax in relation to such goods and / or services

Sub-section (4) provides for exemption from payment of IGST by way of a notification. Central Government may notify that no tax shall be payable by any taxable person in respect of such supplies of goods and / or services as specified in the Schedule (to be provided) in the Act. Such exemption may be subject to such conditions as may be notified.

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