GST vs IGST: Difference and Comparison

GST is a uniform tax levied on all goods and services to end the following problems: Central exercise, Luxury Tax, Service Tax, VAT, Entertainment Tax, and Entry Tax.

India has derived very much from GST. The most crucial gain is the abolition of inter-state check posts erected to enforce taxes on cross-border transactions.

There are three forms of GST, i.e., CGST, SGST, and IGST.

1. CGST’s complete form is the central goods and services tax
2. SGST’s complete form states goods and services tax.
3. IGST’s full form is integrated goods and services tax.

When the supplier and client are in different states, it is called the Inter-State supply of goods and services. In the case of import and export, the transition is called the Inter-State supply of goods and services.

It is also essential to understand the difference between GST and IGST, as they are used interchangeably by many people. GST is a percentage of income generated from profit or loss from selling goods or services, payable upon completing the business.

Key Takeaways

1. Goods and Services Tax (GST) is a unified tax structure in India with three components: Central GST, State GST, and Integrated GST (IGST).
2. IGST is a GST component charged on the inter-state supply of goods and services, facilitating equal distribution of tax revenue between the central and state governments.
3. Both GST and IGST aim to simplify the tax system, but IGST specifically addresses taxation for interstate transactions.

GST vs IGST

The difference between GST and IGST is that GST is applied to any supply or delivery of any kind of goods or services. In contrast, IGST is a type of GST that the supplier must pay in case of the interstate supply of goods and services.

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Comparison Table

Parameter of Comparison	GST	IGST
Implication	GST can also be said to be a type of indirect tax levied on selling Goods and Services in India.	IGST is a type of GST that the supplier must pay in case of an interstate supply of goods and services.
Importance	The introduction of GST establishes a common unified national market, which attracts foreign investments in the Indian business sector.	On the other hand, IGST will be levied upon the supplier in both cases, i.e. import to India or export from India.
Main features	GST harmonizes the indirect taxation system throughout India by subsuming various taxes into one .hence; it minimizes the administrative burden of the government.	· Exports will be rated at zero per cent. · Central as well as the State govt. I will share the tax. · IGST = CGST + SGST
Disadvantages	· Many services, like Air tickets, courier services, and School fees, became costlier. · It raises complexity for business Plans. · It is a little bit confusing form of taxation in some sectors.	· It increases the optional costs of the taxpayers of the country. · People can rob it as it is an online taxation system, which can be hacked.
Advantages	· GST replaces all major indirect taxes. · It will remove the ‘Cascading Effect’. · It reduces the flow of black money.	· It is a simple model that is also transparent. · Increases the pace of the taxpayer process in the country.

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What is GST?

GST is a uniform tax which is levied on all goods and services to put an end to the following problems –

1. Central exercise
2. Luxury Tax
3. Service Tax
4. VAT
5. Entertainment Tax
6. Entry Tax.

Knowing the current taxation system is beneficial to understand the actual value or meaning of GST. Direct taxes, for example, the income tax, are carried by the person liable for the tax.

The liability of the indirect tax can be declared to the other person. GST replaces all the significant forms of taxes present in the country by removing the Cascading effect.

Central taxes: this form of tax is levied by the Central govt.

State taxes: this form of tax is levied by the different state governments. The current indirect tax has one major problem – the cascading effect.

 

What is IGST?

IGST is a type of GST that the supplier must pay in case of an interstate supply of goods and services. IGST will be levied upon the supplier in both cases, i.e. import to India or export from India.

Under IGST, exports and Central and State govt will be rated at zero per cent. I will share the tax. In simple terms, we can say that IGST = CGST + SGST.

Advantages of IGST

1. It is a simple model that is also transparent.
2. Increases the pace of the taxpayer process in the country.
3. It is the sum of CGST and SGST.
4. The documents are not required to be checked physically; they can be done online.
5. No blockage of funds.

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Main Differences Between GST and IGST

1. The main difference between GST and IGST is that GST is a percentage of income tax that must be paid to the ‘deductor’ when a profit or loss in selling goods and services is made. At the same time, IGST is a type of GST which is needed to be paid by the supplier in case of an interstate supply of goods and services.
2. GST is an indirect tax to be paid to deduct, whereas IGST is a total of State and Central Goods and Service Tax.
3. GST has to be paid whether the deductee made a profit or loss, whereas, Under IGST, exports will be rated at zero per cent and Central and State govt. I will share the tax.
4. GST removes the problem caused by the Cascading Effect, whereas IGST Increases the pace of the taxpayer process in the country.
5. GST reduces the flow of black money in the market. On the other hand, IGST ensures effective management in the field of Business to business, i.e. B2B and business-to-consumer, i.e. B2C transactions.

References

1. https://repository.up.ac.za/bitstream/handle/2263/32342/Cnossen_Preparing(2013).pdf?sequence=1
2. https://books.google.com/books?hl=en&lr=&id=GoOWDwAAQBAJ&oi=fnd&pg=PA60&dq=GST+and+IGST&ots=Krh1okeW_z&sig=WU5tXiRMETdb34MmQlxh3n5a5dQ