| Input Tax Credit<\/td> | The IGST paid on inputs can be utilised to reduce liabilities for IGST, CGST, or SGST<\/td> | Businesses can claim input tax credits for CGST against CGST and for SGST against SGST<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\nInterstate and Intrastate GST Rates With Examples<\/strong><\/h2>\n\n\n\nGST interstate and intrastate supply in India vary based on the type of goods or services provided. The applicable rates are categorised into four GST slabs: 5%, 12%, 18% and 28%. In addition to this, there are some high-value products that have a specific GST rate applicable and some basic products that are in the nil rate category. Let us proceed with examples of how GST is calculated for transactions both interstate as well as intrastate transactions.<\/p>\n\n\n\n Interstate GST Rate Example<\/strong><\/h3>\n\n\n\nSuppose XYZ Pvt. Ltd. in Bengaluru, Karnataka, sold a laptop worth \u20b91,50,000 to someone in Chennai, Tamil Nadu. This is an interstate supply as the supply is crossing the border of the state. Slab-wise applicable GST rate for a laptop is 18%. In this case, IGST is being levied by the Central Government, which is being passed on to the destination state.<\/p>\n\n\n\n IGST Calculation: 1,50,000 X 18% = \u20b927,000<\/p>\n\n\n\n The dealer will add IGST (Integrated GST) of \u20b927,000, which the Centre receives, divided according to a fixed ratio between the Centre and the state in which it is received, that is Tamil Nadu in this case.<\/p>\n\n\n\n As an exception, if the supply is made from Bengaluru, Karnataka to a unit located within Special Economic Zones Karnataka would still be construed as an interstate supply. Invariably, all supplies made to or from Special Economic Zones units are treated as interstate supplies.<\/p>\n\n\n\n Intrastate GST Rate Example<\/strong><\/h3>\n\n\n\nSuppose ABC Private Limited, based in Ahmedabad, Gujarat, supplies televisions worth \u20b92,50,000 to a buyer located in Rajkot, Gujarat. The applicable current rate of GST return is 18%, which is split between 9% CGST and 9% SGST.<\/p>\n\n\n\n CGST\/SGST Calculation: \u20b92,50,000 x 18% = \u20b945,000<\/p>\n\n\n\n \u20b922,500 is collected as CGST as well as SGST in the present case.<\/p>\n\n\n\n The total amount collected by the dealer is \u20b945,000. The CGST would go to the Central Government and the SGST would be paid to the Gujarat Government \u20b922,500 each.<\/p>\n\n\n\n The levy of both intra-state GST rates are by the Central and State Governments. The combined rate of both CGST and SGST is, however, equal to the rate of IGST. In essence, the overall tax burden in an interstate supply will be no different from the overall burden in an intrastate supply. It is just that the tax is being applied differently in one case in relation to the other.<\/p>\n\n\n\n Conclusion<\/strong><\/h2>\n\n\n\nThe difference between interstate and intrastate supply in GST<\/strong> lies in how taxes are applied based on the supply location of the seller and buyer. While the overall applicable tax rate remains the same, the basic difference lies with IGST revenue shared between the centre and states, and CGST\/SGST split between the central and state governments. Understanding these critical distinctions helps in managing tax liabilities and maintaining the aspects of business compliance requirements more efficiently.<\/p>\n\n\n\nFAQs<\/h3>\n\n\n\n \n \n What is IGST with an example?<\/strong><\/h3>\n\n\n IGST (Integrated Goods and Services Tax) is applied on the supply of goods and services during interstate transactions<\/strong> or imports\/exports under GST. For example, if a dealer in Maharashtra sells goods worth \u20b91,00,000 to a buyer in Delhi, IGST at the applicable rate (e.g., 18%) will be charged. The IGST amount of \u20b918,000 will be collected by the central government and later distributed to the destination state (Delhi).<\/p>\n\n<\/div>\n<\/div>\n\n How is interstate GST calculated?<\/strong><\/h3>\n\n\n Interstate GST is calculated by applying the applicable IGST rate<\/strong> to the taxable value of goods or services. For example, if the value of goods supplied from Karnataka to Tamil Nadu is \u20b92,00,000 and the GST rate is 18%, the IGST will be: IGST = \u20b92,00,000 x 18% = \u20b936,000.<\/strong> This tax is collected by the central government and shared with the destination state.<\/p>\n\n<\/div>\n<\/div>\n\n Can IGST be paid through SGST?<\/strong><\/h3>\n\n\n No, IGST cannot be paid directly using SGST credit. The order of tax credit utilization is as follows: IGST credit must first be used to pay IGST liability. Remaining IGST credit can be used for CGST and SGST liabilities. However, SGST credit can only<\/strong> be used to pay SGST and not IGST.<\/p>\n\n<\/div>\n<\/div>\n\n What are the examples of types of GST?<\/strong><\/h3>\n\n\n The four types of GST are:<\/p>\n IGST (Integrated GST):<\/strong> Applied on interstate supplies and exports\/imports. CGST (Central GST):<\/strong> Applied within a state and collected by the central government. SGST (State GST):<\/strong> Applied within a state and collected by the state government. UTGST (Union Territory GST):<\/strong> Applied in Union Territories in place of SGST.<\/p>\nFor example, IGST applies when goods move from Delhi to Gujarat, while CGST and SGST apply to transactions within Delhi.<\/p>\n\n<\/div>\n<\/div>\n \n What if IGST is paid instead of CGST and SGST?<\/strong><\/h3>\n\n\n If IGST is paid instead of CGST and SGST due to an error, the taxpayer must correct it by paying the correct tax (CGST and SGST). The excess IGST paid can then be claimed as a refund<\/strong> or adjusted against future liabilities. This ensures compliance with GST rules and avoids penalties.<\/p>\n\n<\/div>\n<\/div>\n\n What is the 180 days rule for GST?<\/strong><\/h3>\n\n\n The 180 days rule<\/strong> in GST mandates that if a buyer fails to pay the supplier within 180 days of the invoice date, the Input Tax Credit (ITC) availed on that transaction will be reversed. The buyer can reclaim the ITC once the payment is made to the supplier, ensuring that the transaction remains valid under GST rules.<\/p>\n\n<\/div>\n<\/div>\n\n What is the rate of IGST?<\/strong><\/h3>\n\n\n The IGST rate depends on the type of goods or services and falls under one of the four slabs: 5%, 12%, 18%, or 28%.<\/strong> For example, essential goods like food grains attract 5%<\/strong>, while luxury items like cars attract 28%<\/strong>. The rate structure ensures uniformity across interstate supplies.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<\/h3>\n","protected":false},"excerpt":{"rendered":"Key Takeaways The Goods and Services Tax (GST) was implemented in India on July 1st, 2017. The GST regime has two core elements, namely, interstate and intrastate GST, that play a crucial role in identifying the corresponding types of GST- CGST, IGST or SGST. Whether a transaction is an interstate or an intrastate, one depends […]<\/p>\n","protected":false},"author":8,"featured_media":56014,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-55997","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst"],"_links":{"self":[{"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/posts\/55997","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/comments?post=55997"}],"version-history":[{"count":4,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/posts\/55997\/revisions"}],"predecessor-version":[{"id":56120,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/posts\/55997\/revisions\/56120"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/media\/56014"}],"wp:attachment":[{"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/media?parent=55997"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/categories?post=55997"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/piceapp.com\/blogs\/wp-json\/wp\/v2\/tags?post=55997"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} |