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UNDERSTANDING INTER-STATE GST (IGST)

Goods and Services Tax - GST - By: - Dr. Sanjiv Agarwal - Dated:- 15-1-2016 - According to Model IGST Law, IGST shall mean the tax levied under the IGST Act on the supply of any goods and / or services in the course of inter-state trade or commerce. IGST Act shall apply to whole of India. According to the report of the Task Force on GST, 13th Finance Commission (2009), it had recommended that adoption of the IGST Model for implementation with the caveat that a strong IT infrastructure and comple .....

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State transactions of taxable goods and services with appropriate provision for consignment or stock transfer of goods and services. The inter-State seller will pay IGST on value addition after adjusting available credit of IGST, CGST, and SGST on his purchases. The Exporting State will transfer to the Centre the credit of SGST used in payment of IGST. The Importing dealer will claim credit of IGST while discharging his output tax liability in his own State. The Centre will transfer to the impor .....

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ill transfer to the Centre the credit of SGST used in payment of IGST. The Importing dealer will claim credit of IGST while discharging his output tax liability in his own State. The Centre will transfer to the importing State the credit of IGST used in payment of SGST. The relevant information is also submitted to the Central Agency which will act as a clearing house mechanism, verify the claims and inform the respective governments to transfer the funds. Revenue from IGST will be apportioned a .....

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Central Clearing Agency and the Assessee will not be concerned with such adjustment at all. Under IGST, a dealer can establish hub and spoke approach for distribution of his final products. He can maintain depots at few strategic locations in country and from those locations, he can distribute goods to nearby States. This will be very cost effective distribution network for assessee. Advantages of IGST Model The major advantages of IGST Model are: Maintenance of uninterrupted ITC chain on inter- .....

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