Basis of charge in the case of inter-State supplies of goods or services or both is given by Section 5 of IGST Act. These provisions are given below–
GST is charged as IGST –
Inter-State supplies of goods or services or both are chargeable to integrated GST. In this case, CGST and SGST/UTGST is not applicable. If GST rate is 12 %, the entire tax of 12 % is charged as IGST .
IGST Rate –
IGST is charged at such rates which are notified by the Central Government (on the recommendation of GST Council). However, such rate cannot be more than 40 %.
Six different GST rates have been notified for the purpose of charging tax on supply of goods under IGST Act, CGST Act, SGST Act and UTGST Act as follows –
|Different Rates||Inter-State supply||Infra-State supply||Infra-State supply||Infra-State supply|
(i.e., CGST+ SGST/UTGST)
|Schedule I – 5%||5%||2.5%||2.5%||5%|
|Schedule II – 12%||12%||6%||6%||12%|
|Schedule III – 18%||18%||9%||9%||18%|
|Schedule IV – 28%||28%||14%||14%||28%|
|Schedule V -3%||3%||1.5%||1.5%||3%|
|Schedule VI- 0.25%||0.25%||0.125%||0.125%||0.25%|
Alcoholic Liquor Excluded –
All inter-State supplies are covered. However, GST is not applicable on the supply of alcoholic liquor for human consumption.
GST presently not applicable on petroleum products –
Inter-State supplies of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel, are presently not covered by GST. GST in respect of these supplies will be levied from a date which is yet to be notified. p Taxable value – For the purpose of charging GST, taxable value of supply shall be calculated under section 15 .
Reverse Charge –
Generally, GST is payable by the supplier of goods and/or services. However, in a few cases (which are notified by the Government on the recommendation of GST Council), GST is payable by the recipient of supply under reverse charge mechanism.
Supply by unregistered person to a registered person –
If inter-State supply is made by an unregistered person to a registered person, the recipient of supply is required to pay GST under reverse charge mechanism (however, this rule is not applicable during October 13, 2017 and September 30, 2019).
Power to grant exemption –
Government has power to grant exemption by issue of a Notification on the recommendation of GST Council. Full exemption/partial exemption from GST may be given subject to certain condition specified in the relevant notification .
What is inter-State supply –
To find out whether a supply is inter-State supply or not, one has to first ascertain the location of supplier and the place of supply. The following are treated as inter-State supply by virtue of section 7 of IGST Act –
Supply within India
|Case 1||Where the location of supplier of goods/services and the place of supply of goods/services are in two different States.|
|Supply within India||Case 2||Where the location of supplier of goods/services and the place of supply of goods/services are in two different union territories.|
|Supply within India||Case 3||Where the location of supplier of goods/services and the place of supply of goods/services are in a State and a Union Territory.|
|Import of goods/services||Case 4||Supply of goods/services imported into India|
|Export of goods/services||Case 5||Where the supplier of goods/services is located in India and the place of supply is outside India.|
|Supply to SEZ||Case 6||Supply of goods/services to (or by) a Special Economic Zone (SEZ) developer or SEZ unit.|
|Any other||Case 7||Supply of goods/services in the taxable territory (not being intra-State supply) not covered in above cases.|