GST Glossary: Levy of GST on inter state supply

IGST Act of GST Model law defines the levy of GST on inter state supplies. Section 4 of said Act reads as  “(1) There shall be levied a tax called the Integrated Goods and Services Tax on all supplies of goods and/or services made in the course of inter-State trade or commerce at the rate specified in the Schedule to this Act and collected in such manner as may be prescribed.

(2) The Integrated Goods and Services Tax shall be paid by every taxable person in accordance with the provisions of this Act.

(3) Notwithstanding anything contained in sub-section (2), the Central Government may, on recommendation of the Council, by notification, specify categories of supply of goods and/or services the tax on which is payable on reverse charge basis and the tax thereon shall be paid by the person receiving such goods and/or services and all the provisions of this Act shall apply to such person as if he is the person liable for paying the tax in relation to such goods and/or services.
(4) Notwithstanding anything contained in sub-section (1) but subject to such conditions as may be notified in this behalf, no tax under this Act shall be payable by any taxable person in respect of such supplies of goods and/or services as are specified in Schedule . . . to the Act.” ( Text from GST Model Law)
Analysis: GST Model law provide for the levy of IGST on inter state supply of Goods and services. Following is the crux of the provisions provided for levy of IGST on inter state supply.

1. IGST would be levied on inter state supply of Goods and /or services.
2. IGST will be equal to the total of CGST plus SGST levied on intra state supplies.
3. Inter state supply has been defined as a supply where the Location of supplier and place of supply are in different states.
4. Further any supply of Goods and /or services in course of import into the territory of India shall be deemed to be supply of Goods  or of services, or both in course of inter state trade or commerce. (As per 122nd constitution amendment bill later on passed by parliament and become 101th Constitution amendment Act.In case of import reverse charge will be applicable.
5. This levy will arise only for the supplies made by a taxable person. Taxable person is defined as one who is registered or liable to be registered and their supplies exceeds the threshold limit of Rs. 10 Lac/5Lac. Although there are some cases where a supplier will be taxable person even without threshold limit.