The integrated goods and services tax (IGST) of Rs 32,000 crore has been allocated between the centre and states in the month of October 2018. Of the total Rs 32,000 crore, the states’ share would be over Rs 15,000 crore. The apportionment would add to the goods and services tax (GST) revenue of both the centre and states for October. The total revenue collection figures for the month would be released on November 01, 2018.
This is the fifth time that IGST funds have been divided between the centre and states. Earlier, Rs 29,000 crore was settled in September, Rs 12,000 crore in August, Rs 50,000 crore in June and Rs 35,000 crore in February this year. When some substantial amount accrues to IGST pool it is apportioned between the centre and states so that it does not lie idle with the centre and Rs 32,000 crore had been apportioned tin October. Under GST, the tax levied on consumption of goods or rendering of service is split 50:50 between the centre and the state. Such tax is known as central GST (CGST) and state GST (SGST).
On inter-state movement of goods as well as imports, an IGST is levied, which accrues to the centre. A cess is levied on top of these taxes on sin and luxury goods which make up for the compensation kitty used to make good of any revenue shortfall faced by states on implementation of GST. Ideally, there should be 'nil' balance in the IGST pool since the amount should be used for payment of CGST and SGST. As some businesses are ineligible to claim the benefits of input tax credit (ITC), the balance gets accumulated in the IGST pool.
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