Review GST Sops timing , urges Industry

Review GST Sops timing , urges Industry

Subject : Economy

Context : While the GST Council meets on Saturday to discuss tax cuts on critical COVID-19 related material including vaccines, medicines and equipment, industry donors are urging a rethink on the timing for the applicability of the Integrated GST (IGST) exemption announced on imported relief supplies after the council’s last meeting.

Concept :

• IGST meaning Integrated Goods and Service Tax, is one of the three categories under Goods and Service Tax (CGST, IGST and SGST) with a concept of one tax one nation.
• IGST falls under Integrated Goods and Service Tax Act 2016.
• IGST is charged when movement of goods and services from one state to another. For example, if goods are moved from Tamil Nadu to Kerala, IGST is levied on such goods.
• The revenue out of IGST is shared by state government and central government as per the rates fixed by the authorities.

Under Article 269A of the Constitution,

• The GST on supplies in the course of interState trade shall be levied and collected by the Government of India and
• such tax shall be apportioned between the Union and the States according to the provisions of law on the recommendations of the Goods and Services Tax Council.
• Under the IGST scheme, 50% of the collections will go to the Centre (as the Central Goods and Services Tax component) and the remaining 50% will be allocated to the States and Union Territories (as the State Goods and Services Tax component). And, 42% of the CGST will be devolved to the States and Union Territories.