{"id":33479,"date":"2026-06-21T09:55:18","date_gmt":"2026-06-21T04:25:18","guid":{"rendered":"https:\/\/blogrevamp.cashfree.com\/?p=33479"},"modified":"2026-06-21T09:55:20","modified_gmt":"2026-06-21T04:25:20","slug":"what-is-igst","status":"publish","type":"post","link":"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/","title":{"rendered":"What is IGST? Full Form, Meaning, Calculation and Refund Guide"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a9fc5f82e202\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #364250;color:#364250\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #364250;color:#364250\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a9fc5f82e202\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/#What_is_IGST_Full_Form_and_Meaning\" >What is IGST? Full Form and Meaning<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/#Who_Collects_and_Governs_IGST\" >Who Collects and Governs IGST?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/#Difference_Between_IGST_CGST_SGST_and_UTGST\" >Difference Between IGST, CGST, SGST and UTGST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/#What_is_Inter-State_and_Intra-State_under_the_GST_Regime\" >What is Inter-State and Intra-State under the GST Regime?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/#What_is_Place_of_Supply_Under_IGST\" >What is Place of Supply Under IGST?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/#IGST_Rates_in_India_Latest_GST_Slabs\" >IGST Rates in India (Latest GST Slabs)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/#How_is_IGST_Calculated\" >How is IGST Calculated?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/#How_Does_Input_Tax_Credit_Work_Under_IGST\" >How Does Input Tax Credit Work Under IGST?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/#How_to_Claim_an_IGST_Refund\" >How to Claim an IGST Refund?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/#How_to_File_IGST_Returns\" >How to File IGST Returns?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-igst\/#FAQs_on_IGST\" >FAQs on IGST<\/a><\/li><\/ul><\/nav><\/div>\n\n<h3 class=\"wp-block-heading\">TL;DR<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>IGST stands for Integrated Goods and Services Tax<\/li>\n\n\n\n<li>It applies to interstate supplies, imports, and SEZ transactions<\/li>\n\n\n\n<li>IGST is collected by the Central Government<\/li>\n\n\n\n<li>Revenue is shared with the destination state<\/li>\n\n\n\n<li>IGST enables seamless Input Tax Credit across state borders<\/li>\n\n\n\n<li>It replaced the Central Sales Tax (CST) system<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Do you know which tax applies when a manufacturer in Mumbai ships goods to a retailer in Delhi?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Yes, it&#8217;s IGST.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A part of the GST regime, the IGST or Integrated Goods and Services Tax is critical for processing taxation on goods and services between states. IGST is meant to optimise business proceedings and deals between two entities residing in different states.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Instead of splitting taxes between states at the point of sale, IGST streamlines the process under a single levy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One of the three core layers of the GST system in India, in this article, we will discuss what is IGST, its key rules, and applicable sections.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_IGST_Full_Form_and_Meaning\"><\/span>What is <strong>IGST<\/strong>?<strong> Full Form and Meaning<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">IGST (Integrated Goods and Services Tax) is a type of GST levied on the interstate supply of goods and services in India\u2014that is, when a transaction takes place between two different states or union territories. It is collected by the Central Government and later distributed between the Centre and the destination state based on GST settlement rules.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In practice, IGST represents a combination of Central GST (CGST) and State GST (SGST). However, unlike SGST, the revenue collected under IGST is apportioned between the Centre and the state where the goods or services are ultimately consumed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The key distinction between IGST, CGST, and SGST lies in the nature of the transaction:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>IGST<\/strong> applies to interstate transactions and imports.<\/li>\n\n\n\n<li><strong>CGST and SGST<\/strong> apply to intrastate transactions, where the supplier and buyer are located within the same state.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Introduced under the Integrated Goods and Services Tax (IGST) Act, 2017, IGST replaced the earlier Central Sales Tax (CST) framework. It plays a crucial role in India&#8217;s GST system by enabling seamless tax credits across states, reducing tax cascading, and supporting a unified national market.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_Collects_and_Governs_IGST\"><\/span><strong>Who Collects and Governs IGST?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The administration and collection of IGST are overseen by the Central Board of Indirect Taxes and Customs (CBIC) on behalf of the Central Government.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the Central Government does not retain the entire IGST amount collected. Since IGST is levied on interstate transactions, the tax revenue is distributed between the Centre and the destination state &#8211; the state where the goods or services are ultimately consumed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This destination-based tax structure ensures that the state where consumption occurs receives its share of the tax revenue, promoting fair allocation of GST collections across India.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><em>Also read: <a href=\"https:\/\/www.cashfree.com\/blog\/what-is-cgst-central-goods-and-services-tax\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">What is CGST? Full Form, Meaning and Key CGST Act Explained<\/mark><\/a><\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Difference_Between_IGST_CGST_SGST_and_UTGST\"><\/span>Difference Between IGST, CGST, SGST and UTGST<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Tax<\/strong><\/td><td><strong>Applicable When<\/strong><\/td><td><strong>Collected By<\/strong><\/td><td><strong>Revenue Goes To<\/strong><\/td><\/tr><tr><td><strong>CGST<\/strong><\/td><td>Within same state (intra-state)<\/td><td>Central Government<\/td><td>Central Government<\/td><\/tr><tr><td><strong>SGST<\/strong><\/td><td>Within same state (intra-state)<\/td><td>State Government<\/td><td>Respective State Government<\/td><\/tr><tr><td><strong>IGST<\/strong><\/td><td>Between states (interstate)<\/td><td>Central Government<\/td><td>Shared between Centre &amp; State<\/td><\/tr><tr><td><strong>UTGST<\/strong><\/td><td>Within Union Territories<\/td><td>Central Government<\/td><td>Respective Union Territory<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">This structure is built to ensure the credit flow is seamless and to address the tax-on-tax issues. Today IGST is a critical link in India\u2019s unified tax framework helping businesses and the government set the right precedents from when the goods or services are delivered and where they are delivered.&nbsp;<\/p>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><strong><a href=\"https:\/\/www.cashfree.com\/gst-calculator\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">Try the Free GST Calculator<\/mark><\/a><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Inter-State_and_Intra-State_under_the_GST_Regime\"><\/span><strong>What is Inter-State and Intra-State under the GST Regime?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Inter-State Supply &#8211; Section 7 of the IGST Act<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">As per <a href=\"https:\/\/taxinformation.cbic.gov.in\/content\/html\/tax_repository\/gst\/acts\/2017_IGST_Act\/active\/chapteriv\/section7_v1.00.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Section 7 of the IGST Act, 2017<\/a>, a supply is classified as interstate when the location of the supplier and the place of supply are in different states or Union Territories. Such transactions attract IGST.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Interstate supply also includes;<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Imports into India<\/li>\n\n\n\n<li>Exports from India<\/li>\n\n\n\n<li>Supplying goods to or getting them from SEZ units (even within same state)<\/li>\n\n\n\n<li>Notified transactions involving EOUs<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What is Intra-State Supply? &#8211; Section 8 of the IGST Act<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Under <a href=\"https:\/\/cbic-gst.gov.in\/hindi\/IGST-bill-e.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Section 8 of the IGST Act, 2017<\/a>, a supply is intra-state when the supplier\u2019s location and place of supply are within the same state or Union Territory. These transactions attract CGST + SGST, not IGST.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Parameter<\/strong><\/td><td><strong>Inter-State Supply<\/strong><\/td><td><strong>Intra-State Supply<\/strong><\/td><\/tr><tr><td><strong>Supplier &amp; Place of Supply<\/strong><\/td><td>Different states\/UT&#8217;s<\/td><td>Same state\/UT<\/td><\/tr><tr><td><strong>Tax Applicable<\/strong><\/td><td>IGST<\/td><td>CGST + SGST<\/td><\/tr><tr><td><strong>Collected By<\/strong><\/td><td>Central Government<\/td><td>Centre (CGST) + State (SGST)<\/td><\/tr><tr><td><strong>Revenue Destination<\/strong><\/td><td>Shared between Centre &amp; destination state<\/td><td>Split between Centre &amp; origin state<\/td><\/tr><tr><td><strong>SEZ Treatment<\/strong><\/td><td>Always interstate (IGST applies)<\/td><td>Not applicable<\/td><\/tr><tr><td><strong>Example Transaction<\/strong><\/td><td>Mumbai \u2192 Bengaluru<\/td><td>Delhi \u2192 Delhi<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Place_of_Supply_Under_IGST\"><\/span><strong>What is Place of Supply Under IGST?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Place of Supply is the key component of IGST, and it determines which state will receive the tax revenue. Following the GST system, taxation is based on the destination. This means the tax accrues where the goods or services rendered by businesses or individuals are actually consumed and not where they are delivered from.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under the Place of Supply framework, we need to under the IGST meaning from four sections;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Place of Supply of Goods &#8211; Domestic Governed by Section 10<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Under Section 10 of the IGST Act, the place of supply is referred to the location where goods are delivered to the recipient. Hence, this rule puts taxation to the point of consumption.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But few service transactions or supply of goods can modify this principle;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Bill-to-ship-to model:<\/strong> When goods are delivered to a third party on the buyer\u2019s instructions, the place of supply is the buyer\u2019s location, not the delivery location.<br><br>For instance, a retailer asks the distributor to deliver the goods to Lucknow, but the retailer works in Mumbai. In this case, the IGST will be applicable at Mumbai and not Lucknow.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Installation or assembly at site<\/strong>: POS is the location where installation is carried out.<br><\/li>\n\n\n\n<li><strong>Goods on board a conveyance (e.g., aircraft\/train): <\/strong>POS is the place of departure of the conveyance.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Place of Supply of Goods \u2014 Imports and Exports (Section 11)<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In Section 11 of the IGST Act, 2017 the place of supply the POS rules for intra-state supply of goods or services governs taxation aligns with destination-based GST model.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Import of Goods: <\/strong>Here, the place of supply is the location of importers in India. For these transactions, interstate rules apply and the IGST is levied along with the customs duty at the time of import.<br><\/li>\n\n\n\n<li><strong>Export of Goods: <\/strong>When the place of supply is outside India, no GST is applicable making them \u201c<em>zero-rated supplies\u201d<\/em>. However, businesses that have paid taxes on inputs can <a href=\"https:\/\/www.cashfree.com\/blog\/input-tax-credit-gst\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">claim Input Tax Credit (ITC) or refunds<\/mark><\/a>.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Place of Supply of Services &#8211; Domestic (Section 12)<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Section 12 of the IGST Act 2017 defines the taxation of supply of services whether it&#8217;s a B2B or B2C transaction. The general rule for <a href=\"https:\/\/www.cashfree.com\/blog\/what-businesses-need-to-know-about-b2b-payments\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">B2B transactions<\/mark><\/a> is that the POS is the location of registered recipients.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With B2C transactions, the POS is the location of the recipient, but if that cannot be determined, the POS defaults to the location of the supplier. But there are some exceptions to where POS applies here;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>For immovable property services, the POS applies to the property location.&nbsp;<\/li>\n\n\n\n<li>For event-based services, POS applies to where the event is held.&nbsp;<\/li>\n\n\n\n<li>For restaurants and catering services, POS is where the services are actually performing.&nbsp;<\/li>\n\n\n\n<li>For telecom services, POS applies to the location where the connection is installed, or the SIM is registered.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Place of Supply of Services \u2014 Cross-Border (Section 13)<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Section 13 of the IGST Act, 2017 is applicable in situations when the supplier or the recipient of services is located outside India. This section clears any confusion related to whether the transaction is taxable in India or not, and if yes, where IGST applies.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In general, the POS for transactions under Section 13 is the location of the recipient. If the recipient resides in India, the supply is taxable under IGST. However, there are some exceptions;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>For services where physical presence is required, the POS is where the services are actually rendered.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">For Indian businesses using global tools such as SaaS platforms, <a href=\"https:\/\/www.cashfree.com\/blog\/top-subscription-management-software\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">software subscriptions<\/mark><\/a>, or digital advertising from foreign vendors, the POS is usually India, generally the recipient\u2019s location.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In such cases, IGST is payable under the Reverse Charge Mechanism (RCM), making compliance essential for cross-border service consumption.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"IGST_Rates_in_India_Latest_GST_Slabs\"><\/span>IGST Rates in India (Latest GST Slabs)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">IGST rates follow the standard <a href=\"https:\/\/www.cashfree.com\/blog\/new-gst-rates\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">GST slab structure<\/mark><\/a> while focusing on uniformity across India. This means, there is no state-wise variation for IGST rates in India. The applicable slabs to IGST are;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>0% &#8211; on essential goods<\/li>\n\n\n\n<li>0.25% &amp; 3% &#8211; Precious stones and Metals<\/li>\n\n\n\n<li>5% &#8211; Mass consumption goods&nbsp;<\/li>\n\n\n\n<li>12% &amp; 18% &#8211; Standard goods and services<\/li>\n\n\n\n<li>28% &#8211; Luxury and Sin goods<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_is_IGST_Calculated\"><\/span>How is IGST Calculated?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Inter-State B2B Sale<\/strong><\/td><td><strong>Intra-State Comparison&nbsp;<\/strong><\/td><td><strong>Import Calculation<\/strong><\/td><\/tr><tr><td>Seller in Bengaluru &amp; Buyer in Delhi&nbsp;<br>Value of goods = \u20b950,000<br>IGST @ 18%<br>IGST = \u20b99,000<br>Invoice total = \u20b959,000<br><br>Tax flow: \u20b99,000 is collected by the Central Government, and the destination state (Delhi) receives its share (\u20b94,500).<\/td><td>Same goods sold within Karnataka<br>CGST @ 9% + SGST @ 9%<br><br>CGST = \u20b94,500 + SGST = \u20b94,500 = \u20b99,000 total<br><br>Total tax burden is identical to IGST (\u20b99,000), but the collection and distribution mechanism differs.<\/td><td>Assessable Value (AV) = \u20b91,00,000<br>Basic Customs Duty (BCD) @ 10% = \u20b910,000<br>Education Cess @ 3% on BCD = \u20b9300<br><br>IGST Base = \u20b91,10,300<br>IGST @ 18% = \u20b919,854<br><br>IGST is calculated on a value that includes customs duties, increasing the effective tax base for imports.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Does_Input_Tax_Credit_Work_Under_IGST\"><\/span><strong>How Does Input Tax Credit Work Under IGST?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Input Tax Credit (ITC) offers businesses an easy way out and saves on taxes as they can offset the amount of tax paid on purchasing goods or services. ITC eliminates tax on tax or the cascading of taxes reducing a business owner\u2019s overall liability under GST.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under Rule 88A of the CGST Rules, 2017 credit utilisation under IGST must follow a mandatory order.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>First and foremost, set off the tax against IGST liability.&nbsp;<\/li>\n\n\n\n<li>Then remaining credit can be used to pay off CGST and SGST.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">A key advantage of the IGST credit can be used to pay IGST, CGST, and SGST. However, note that CGST credit cannot be used to pay SGST and similarly SGST cannot be used to pay CGST.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Claim_an_IGST_Refund\"><\/span><strong>How to Claim an IGST Refund?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The key scenarios where IGST refund is applicable where the tax has not been paid, but it&#8217;s ultimately due. Some common scenarios, include;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Zero rated supplies (exports)<\/li>\n\n\n\n<li>Supplies to SEZ units or developers<\/li>\n\n\n\n<li>Inverted duty structure<\/li>\n\n\n\n<li>Excess tax payment<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Now to process your IGST refund, there are two routes;<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Export with IGST Payment: <\/strong>When IGST is paid on exports, the shipping bill itself acts as the refund application. Once returns are filed (GSTR-1 and GSTR-3B), the refund is auto-processed by Customs.<br><\/li>\n\n\n\n<li><strong>Export Under LUT (Without IGST Payment): <\/strong>This is when businesses export under LUT (Letter of Undertaking) and they can claim refund on the accumulated ITC. For this, businesses need to file RFD-01 on the GST portal.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">There\u2019s a time limit to apply for a refund, which is 2 years and the refunds take around 60 days to process. And the documents needed for the same are;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.cashfree.com\/blog\/gstr-1-due-date-filing-process\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">GSTR-1<\/mark><\/a> and GSTR-3B<\/li>\n\n\n\n<li>Shipping bill \/ Export General Manifest (EGM)<\/li>\n\n\n\n<li>FIRC\/BRC (for export of services)<\/li>\n\n\n\n<li>RFD-01 (for LUT refunds)<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">You can also track refunds through the GST portal. <a href=\"https:\/\/www.cashfree.com\/blog\/gst-login-password-portal-guide\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">Login to your GST portal<\/mark><\/a>, go to Refunds, and check the Track Application Status page.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_File_IGST_Returns\"><\/span>How to File IGST Returns?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">There is no separate return to be filed for IGST, the proceedings and transactions under IGST are reported with standard <a href=\"https:\/\/www.cashfree.com\/blog\/gst-return-filing\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">GST returns<\/mark><\/a>. It rests on the businesses to disclose interstate transactions to ensure correct tax payment and credit flow.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key Returns to File for IGST Reporting<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>GSTR-1 (Outward Supplies):<\/strong> Details of interstate sales (B2B, B2C, exports) where IGST is charged.<br><br>GSTR-1 is filed on the 11th of every month for the previous month.<br><\/li>\n\n\n\n<li><strong>GSTR-3B (Summary Return):<\/strong> Consolidated tax liability, including IGST payable and ITC claimed.<br><br>GSTR-3B is filed on the 20th of every month for the previous month.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>GSTR-2B (Auto-generated):<\/strong> Reflects eligible ITC, including IGST paid on purchases and imports.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">IGST is more than just a tax on interstate transactions; it is the mechanism that keeps India\u2019s GST system seamless, ensuring smooth credit flow, eliminating cascading taxes, and enabling businesses to operate across state borders without friction.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From determining the correct place of supply to managing ITC utilisation and refunds, getting IGST right has a direct impact on compliance, cash flow, and overall profitability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For growing businesses, especially those handling multi-state transactions or cross-border payments, manual handling of GST complexities can quickly become a bottleneck.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is where Cashfree can help. With automated payment workflows, smart reconciliation, and GST-ready reporting, Cashfree simplifies how you manage transactions and stay compliant.<\/p>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><strong><em>Explore Cashfree\u2019s solutions to streamline your payments, <a href=\"https:\/\/www.cashfree.com\/gst-verification\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">GST verification<\/mark><\/a><\/em><\/strong>, <strong><em>reduce errors, and stay ahead of GST compliance so you can focus on scaling your business, not managing taxes.<\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs_on_IGST\"><\/span><strong>FAQs<\/strong> on IGST<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What is the full form of IGST?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The full form of IGST is Integrated Goods and Services Tax. It is the tax applicable on the supply of goods and services between different states or Union Territories under the GST framework.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What is the difference between IGST and CGST?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">CGST and SGST are levied on transactions where goods and services are given with the same state. But IGST is applicable to the supply of goods and services between different states. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Do we get an IGST refund?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yes, refunds are given to businesses under IGST, and it happens in two ways. Either by claiming the refund of the IGST paid on exports or by claiming Input Tax Credits (ITC) on inputs where taxes are paid for zero-rated GST supplies.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Who will collect IGST?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">IGST is collected by the central government, but it is later distributed between the origin and destination states.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What are the key benefits of IGST for businesses?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Businesses under IGST benefit from the reduction in tax-related complications on interstate transactions. The uniform tax rate ensures there is no tax on tax system as it was in the previous central sales tax regime.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>In case you missed it:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.cashfree.com\/blog\/gst-state-code-list\/\" target=\"_blank\" rel=\"noreferrer noopener\">GST State Code List \u2013 All States &amp; UT Codes<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.cashfree.com\/blog\/what-is-gst-goods-and-service-tax\/\" target=\"_blank\" rel=\"noreferrer noopener\">What is GST, Full Form, Meaning &amp; Key Features<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.cashfree.com\/blog\/what-is-cgst-central-goods-and-services-tax\/\" target=\"_blank\" rel=\"noreferrer noopener\">What is CGST?<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.cashfree.com\/blog\/gst-login-password-portal-guide\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to Access GST Portal<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.cashfree.com\/blog\/gst-registration-online-process-documents\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to Apply for GST Number, Process &amp; Documents<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.cashfree.com\/blog\/gst-rules-regulations\/\" target=\"_blank\" rel=\"noreferrer noopener\">GST Rules &amp; Regulations in India 2026<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.cashfree.com\/blog\/eway-bill-online-generation\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to Generate E-Way Bill Online<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.cashfree.com\/blog\/new-gst-rates\/\" target=\"_blank\" rel=\"noreferrer noopener\">Updated GST Slabs List in India (0%, 5%, 18%, 40%)<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.cashfree.com\/blog\/gstr-1-due-date-filing-process\/\" target=\"_blank\" rel=\"noreferrer noopener\">What is GSTR-1?<\/a><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>TL;DR Do you know which tax applies when a manufacturer in Mumbai ships goods to a retailer in Delhi?&nbsp; Yes, it&#8217;s IGST. A part of the GST regime, the IGST or Integrated Goods and Services Tax is critical for processing taxation on goods and services between states. IGST is meant to optimise business proceedings and<\/p>\n","protected":false},"author":142,"featured_media":33497,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_themeisle_gutenberg_block_has_review":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[9970],"tags":[],"class_list":["post-33479","post","type-post","status-publish","format-standard","has-post-thumbnail","category-gst"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What Does IGST Mean? 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