Question

In the abbreviation IGST, the letter 'I' stands for what ?

• A. Interim
• B. Integrated
• C. Interstate
• D. India

Hint:

Although IGST is applied on "Interstate" trade, the formal legal name of the tax is "Integrated" Goods and Services Tax.

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
The Goods and Services Tax (GST) is a unified, multi-stage, destination-based indirect tax system implemented in India on July 1, 2017.
GST is designed to eliminate the cascading effect of double taxation by taxing the value added at each stage of the supply chain.

Step 2: Detailed Explanation:
Under the dual GST model adopted by India, tax is collected under three categories based on the nature of the transaction:
1. CGST (Central GST): Collected by the Central Government on intrastate transactions (within a single state).
2. SGST (State GST): Collected by the State Government on intrastate transactions.
3. IGST (Integrated GST): Applied to all interstate transactions (between two different states) and imports.
The letter 'I' in IGST stands for Integrated.
It is called Integrated because the Central Government collects the entire tax amount in one single assessment, and then shares the revenue with the consuming state according to constitutional formulas.
This prevents the need for traders to pay multiple local taxes when shipping goods across state borders.
Option (A) Interim, Option (C) Interstate, and Option (D) India are incorrect terms.

Step 3: Final Answer:
The correct option is (B).