The IGST Act, 2017 governs the levy and collection of tax on inter-state supply of goods and services in India. It is a key component of the Goods and Services Tax (GST) framework, aimed at ensuring seamless movement of goods and services across state borders.

1. Objectives of the IGST Act

• To regulate and levy tax on inter-state supplies of goods and services.
• Ensure seamless flow of input tax credit (ITC) across states.
• Provide a mechanism for transfer of taxes between the Centre and the States.

2. Applicability

• Applies to inter-state supplies including imports and exports.
• Covers supplies between two states, union territories, or a state and a union territory.
• Also applicable to supplies to or by SEZs and international transactions.

3. Key Definitions

• Inter-State Supply: Supply where the location of the supplier and place of supply are in different states or union territories.
• Intra-State Supply: Supply where the supplier and place of supply are in the same state (covered under CGST & SGST Acts).
• Zero-Rated Supply: Exports and supplies to SEZs are treated as zero-rated under IGST.

4. Levy and Collection of IGST

• IGST is levied by the Central Government on inter-state supplies.
• The rate is equal to the sum of applicable CGST and SGST/UTGST rates.
• Collected IGST is apportioned between the Centre and the destination state.

5. Input Tax Credit (ITC)

• ITC of IGST can be used to pay IGST, CGST, and SGST in a specified order.
• Promotes seamless credit utilization across the GST structure.

6. Place of Supply Rules

• Critical for determining whether a supply is inter-state or intra-state.
• Defined separately for goods and services under the IGST Act.
• For goods: Based on location of delivery.
• For services: Based on recipient’s location or place of performance.

7. Zero-Rated Supplies

• Includes exports and supplies to SEZ developers/units.
• Input tax credit is available even if the supply is exempt.
• Refund can be claimed through LUT (Letter of Undertaking) or payment of IGST.

8. Apportionment of IGST

• IGST collected by the Centre is shared with the destination state of the goods/services.
• Ensures destination-based taxation model.

9. Import and Export under IGST

• Imports are treated as inter-state supplies and attract IGST in addition to customs duties.
• Exports are treated as zero-rated and eligible for refunds.

10. Role of GSTN and Compliance

• GSTN portal facilitates return filing, payment, and matching of IGST credits.
• Proper documentation, invoices, and place of supply rules must be followed.

11. Amendments and Notifications

• IGST rates and procedures are notified and amended by the GST Council and Central Government as needed.

12. Significance

The IGST Act ensures a unified and efficient tax mechanism for inter-state trade in India, reducing tax barriers and enabling a common national market.

The CGST Act, 2017 is a key component of India's Goods and Services Tax (GST) regime. It governs the levy and collection of tax on intra-state supply of goods and services by the Central Government. The Act aims to streamline indirect taxation and create a unified market across the country.

Key Objectives

• To consolidate multiple indirect taxes levied by the Centre.
• To simplify tax compliance and improve transparency.
• To prevent tax cascading and ensure seamless flow of input tax credit (ITC).
• To support the ‘One Nation, One Tax’ vision under GST.

Scope and Applicability

• Applies to intra-state supply of goods and/or services within a state or union territory (excluding Jammu & Kashmir).
• Inter-state supplies are governed by the Integrated GST (IGST) Act.

Key Provisions of the CGST Act

1. Levy and Collection (Section 9)

• CGST is levied on intra-state supplies of goods or services.
• The applicable CGST rate is as notified by the Government on the recommendations of the GST Council.
• Reverse charge mechanism (RCM) applies in specified cases.

2. Composition Scheme (Section 10)

• Small taxpayers with turnover up to ₹1.5 crore can opt for a simplified composition scheme.
• Tax is paid at a nominal rate without availing input tax credit.

3. Time of Supply (Sections 12 & 13)

• Determines the point of taxation for goods (Section 12) and services (Section 13).
• Based on earliest of issuance of invoice, receipt of payment, or provision of service.

4. Value of Supply (Section 15)

• Taxable value includes price paid, duties, fees, incidental expenses, and subsidies linked to price.
• Discounts are allowed only if given before or at the time of supply and properly documented.

5. Input Tax Credit (ITC) (Sections 16-21)

• Allows registered persons to claim credit of taxes paid on inputs used for taxable supplies.
• ITC can be claimed only if conditions like possession of tax invoice, receipt of goods/services, and tax payment by supplier are met.
• Blocked credits under Section 17(5) include motor vehicles (with exceptions), food and beverages, and personal consumption.

6. Registration (Section 22-30)

• Mandatory for businesses with aggregate turnover exceeding ₹20 lakhs (₹10 lakhs in special category states).
• Voluntary registration is also permitted.

7. Tax Invoice and Documentation (Section 31)

• Registered suppliers must issue tax invoices containing prescribed details like GSTIN, HSN/SAC codes, and tax rates.

8. Returns Filing (Sections 37-48)

• Regular taxpayers must file GSTR-1 (outward supplies), GSTR-3B (summary), and annual returns.
• Composition taxpayers file quarterly returns using CMP-08 and GSTR-4 annually.

9. Assessment and Audit (Sections 59-66)

• Includes self-assessment, provisional assessment, scrutiny of returns, and departmental audit.

10. Appeals and Revisions (Sections 107-121)

• Appeals can be filed before the Appellate Authority, Appellate Tribunal, High Court, and Supreme Court.

Offences and Penalties

• Penalty up to 100% of tax due for fraud or suppression of facts.
• Monetary penalties and prosecution for serious offences like issuing fake invoices or obstructing officers.

Important Rules and Notifications

• CGST Rules, 2017 detail procedural aspects like registration, invoice format, ITC mechanism, etc.
• Regular amendments notified via the official CBIC website.

Recent Developments

• Implementation of e-invoicing for businesses above prescribed turnover limits.
• Auto-population of returns through GSTN system integration.
• Dynamic QR codes for B2C transactions for specified categories of taxpayers.

The UTGST Act, 2017 is a key component of the GST regime in India. It provides for the levy and collection of tax on intra-state supplies of goods and services in Union Territories (UTs) that do not have their own legislatures, in conjunction with the Central Goods and Services Tax (CGST) Act.

1. Objectives of the UTGST Act

• To levy and collect GST on intra-state supplies within Union Territories.
• Ensure uniformity of GST provisions across UTs without legislatures.
• Complement CGST to provide a dual GST structure in UTs.

2. Applicability

• Applicable to Union Territories without their own legislature.
• Includes: Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli and Daman and Diu, Lakshadweep, and Ladakh.

3. Key Features

• UTGST is levied on the value of intra-state supplies of goods and services, along with CGST.
• The structure is similar to the State GST (SGST) for states.
• UTGST replaces SGST in Union Territories without legislatures.

4. Tax Rates and Levy

• UTGST is levied by the Central Government, but collected for the Union Territory.
• The tax rates are notified and updated by the GST Council.

5. Input Tax Credit (ITC)

• ITC of UTGST can be utilized only for paying UTGST.
• Cannot be used to pay CGST, SGST, or IGST.
• Credit flow ensures efficient tax compliance within the UT.

6. Intra-State and Inter-State Supplies

• Intra-state supply in a UT: Subject to CGST + UTGST.
• Inter-state supply from or to a UT: Subject to IGST under the IGST Act.

7. Administration

• UTGST is administered by the Central Government through its tax officers.
• Provisions mirror those under the SGST Act for uniform implementation.

8. Transitional Provisions

• Provisions for migration of existing tax registrations, credits, and liabilities from old tax regimes in UTs.
• Special rules were framed to ease the transition to GST in UTs.

9. Refunds and Compliance

• Refunds of UTGST paid on zero-rated supplies are allowed.
• Regular returns like GSTR-1, GSTR-3B, etc., must be filed by registered persons.

10. Amendments

• Changes to the UTGST Act are made through notifications and amendments approved by the GST Council and the Central Government.

11. Importance of the UTGST Act

The UTGST Act ensures a consistent tax structure across the country, even in Union Territories without legislatures. It supports the overall goal of GST — ‘One Nation, One Tax’ — by covering all regions under a unified indirect tax system.

The GST (Compensation to States) Act, 2017 was enacted to provide compensation to states for any revenue loss arising due to the implementation of the Goods and Services Tax (GST). This compensation is provided for a period of five years from July 1, 2017, ensuring that states are not financially disadvantaged by the shift to the GST regime.

Objectives of the Act

• To compensate states for the loss of revenue due to the implementation of GST.
• To ensure smooth transition from the previous tax regime to GST without revenue shocks to the states.
• To uphold the cooperative federalism principle in tax administration.

Key Provisions of the Act

1. Coverage

• Applies to all states and union territories with legislatures that have implemented the State GST Act.
• Compensation is payable for a period of five years from the date of GST rollout (July 1, 2017).

2. Base Year Revenue

• The base year for calculating compensation is the financial year 2015–16.
• Revenue growth is projected at a compounded rate of 14% per annum over the base year revenue.

3. Compensation Formula

• Compensation = Projected Revenue – Actual GST Revenue
• Compensation is calculated every two months and paid accordingly.

4. Compensation Cess

• A cess is levied on certain luxury and sin goods such as:
  • Pan masala
  • Tobacco and tobacco products
  • Aerated waters
  • Motor vehicles (luxury and SUVs)
  • Coal and lignite
• This cess is collected over and above the applicable GST rates.

5. Compensation Fund

• A non-lapsable GST Compensation Fund is created under the Public Account of India.
• All proceeds of the Compensation Cess are credited to this fund.
• Funds are used solely for paying compensation to states.

Administration and Monitoring

• Administered by the Central Government through the GST Council.
• Computation and disbursement monitored by the Council based on data and audited reports.

Extension Beyond Five Years

• Though originally for five years, there have been demands and recommendations to extend compensation due to COVID-19 induced revenue shortfalls.
• Post-2022, the cess is being continued to repay the borrowings made to bridge compensation gaps.

Recent Developments

• The cess continues to be levied even after June 2022 to repay loans taken for GST shortfall during the pandemic.
• States have urged the Centre to consider extending compensation beyond five years due to slower-than-expected recovery.

Conclusion

The GST (Compensation to States) Act plays a vital role in maintaining the fiscal health of states under the GST regime, ensuring cooperative federalism and equitable distribution of revenue.