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.

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

• Tax to be levied shall be called IGST
• IGST shall be levied on all supplies of goods and / or services made in course of inter-state trade on commerce
• Rate of IGST shall be as per Schedule to the Act (yet to be prescribed)
• IGST shall be collected in the prescribed manner for which rules shall be prescribed. Report on Business Processes for GST on GST payment may be referred to in Annexure 6 of the Book
• 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 befor payment of tax.
• 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.
• 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 –

• GST Council shall have to recommend the RCM.
• Central Government shall notify the RCM by way of a notification after GST Council has recommended
• RCM may be notified for specified categories of supplies of goods and / or services
• In RCM, tax shall be paid by the person receiving such goods and/ or services
• 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.

(To be continued…..)