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Debt funds as an Investment Option (IGST).
Context: The Centre has through a notification and a circular eased the paper work required to export goods without the exporter having paid the Integrated Goods and Services Tax (IGST).
Introduction: According to the GST Rules, traders who wanted to export without paying IGST had to provide a bond or letter of undertaking (LUT) promising to pay the tax. This requirement did not clarify who exactly needed to provide a bond and who was eligible to provide a LUT. It is also involved complexity to do with the recipient of these documents. The Centre has allowed the bond or LUT to be submitted manually and not electronically on the GST portal. The notification and circular by the Government, both dated July 7, said that the IGST needs to be paid only for exports after July 1, 2017, and detail the eligibility of exporters to provide the necessary documents.
What is IGST?
- IGST means Integrated Goods and Services Tax, one of the three categories under Goods and Services Tax (CGST, IGST, and SGST), with a concept of one tax one nation.
- The notification and circular by the Government, both dated on July 7, said that the IGST needs to be paid only for exports after July 1, 2017.
- IGST is a part of Goods and Service Tax(GST).
- IGST falls under Integrated Goods and Services Tax Act 2016.
- IGST is charged when movement of goods and services from one state to another.
- The revenue out of IGST is shared by state government and central government as per the rates fixed by the authorities.
As per GST Laws:
- Under the GST regime, an Integrated GST(IGST) would be levied and collected by the Centre on inter-state supply of goods and services.
- Under Article 269A of the Constitution, the GST on supplies in the course of inter-state trade or commerce shall be levied and collected by the Government and such tax shall be appointed between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council.
