IGST
Definition
Integrated GST — levied on inter-state supply of goods and services (and imports). Collected by the Central Government and then apportioned between the Centre and the destination state. IGST rate = CGST rate + SGST rate.
Why is IGST Important?
Navigating the Indian tax system requires a clear understanding of terms like IGST. With the introduction of the new income tax regime alongside the old one, taxpayers must evaluate their deductions, exemptions, and tax brackets carefully. This concept is a key component in optimizing your tax liabilities under the Income Tax Act and GST framework.
Proper tax planning using this metric can help individuals and businesses maximize their take-home income while remaining fully compliant with government regulations. We provide free tax calculators to help you estimate these figures accurately and make informed decisions before filing your returns.
What is IGST?
Integrated Goods and Services Tax (IGST) is levied on inter-state supply of goods and services (i.e., when seller and buyer are in different states) and on imports. The full IGST rate equals the sum of CGST + SGST rates. IGST is collected by the Central Government and then shared with the destination state.
When IGST Applies
| Scenario | Tax Type | Example |
|---|---|---|
| Seller in Maharashtra → Buyer in Gujarat | IGST | 18% IGST |
| Import from USA to India | IGST + Customs | IGST on assessable value |
| E-commerce delivery across states | IGST | 18% IGST |
| SEZ supply | IGST (zero-rated) | Refundable |
IGST Settlement
IGST collected by Central Government is later apportioned: the SGST-equivalent portion is transferred to the destination state. This ensures the consuming state gets its fair share of revenue.