Integrated Goods and Services Tax

IGST Full Form in English, letter by letter

IGST (Integrated Goods and Services Tax) is the GST charged on inter-state supplies and imports, collected by the central government.

IGST Full Form in Indian Languages

Send goods from Maharashtra to Karnataka and the tax on the invoice changes its name. IGST is the Integrated Goods and Services Tax, the GST charged whenever a supply crosses a state border. The name is shown below in six Indian languages.

One tax, three sets of books

GST replaced a pile of central and state levies on 1 July 2017, brought in by the 101st Constitutional Amendment. Within it, a supply inside one state attracts CGST for the centre and SGST for that state side by side, while an inter-state supply attracts a single IGST collected by the central government.

IGST also applies to imports, to supplies to and from special economic zones, and to certain services routed through e-commerce operators. Exports are zero-rated, so tax paid on export inputs comes back as a refund instead of becoming a cost.

The one question that decides which tax applies

Did the goods, or the place of supply of the service, cross a state line? A Pune supplier invoicing a Bengaluru buyer charges IGST; the same supplier invoicing a Pune buyer charges CGST and SGST. The place of supply rules decide it, not where the raw material was bought, and not where the head office sits.

The IGST rate simply mirrors the combined intra-state rate: 18 percent IGST costs the same as 9 percent CGST plus 9 percent SGST. Crossing a border changes the label on the tax, not the size of the bill.

Where the money finally lands

The centre collects IGST, then the amount is settled between the centre and the consuming state under the IGST Act and its settlement rules. On a ten-thousand-rupee invoice from Delhi to Uttar Pradesh at 18 percent, the ₹1,800 of IGST ends up split roughly the way an intra-state sale would have split, about ₹900 to each side.

Businesses track their credit through an electronic ledger. Credit accrued as IGST is used to pay IGST first, then CGST, then SGST, in that order, which is how a seller in one state can set off tax paid on purchases from another.

For sellers, the credit order matters in cash terms. A trader with plenty of IGST credit from inter-state purchases uses it up first against IGST due, then against CGST, then SGST, and pays the balance in cash. Keeping purchase invoices correct, with the supplier's GSTIN and the right tax head, protects that credit.

Rates, slabs and the GST Council

Rates are fixed by the GST Council, a constitutional body chaired by the Union Finance Minister with state finance ministers as members, where decisions need a three-fourths majority and the Centre holds a third of the votes. After the rationalisation that took effect in September 2025, the main slabs are 5 percent and 18 percent, with 40 percent on a short list of demerit goods, nil on essentials and special lower rates on items such as gold.

A compensation cess was introduced in 2017 to cover states against revenue loss and was layered on a few items such as tobacco products. An invoice for those goods can therefore carry IGST plus cess, which is why two similar products can end up with different tax totals.

Where IGST shows up for you

Bank, SSC and UPSC papers ask the full form directly and GST revenue-sharing indirectly, while CA, CS and cost-accounting courses go into set-off order, e-way bills, reverse charge and refunds for exporters. Every one of those starts from the same inter-state test.

For everyday work, check whether an invoice is intra-state or inter-state before comparing tax, and keep the supplier's state and the place of supply apart in your head. Most GST mistakes in small businesses come from mixing those two up.

IGST on Imports and Exports

When goods are imported, IGST is collected by customs at the port along with basic customs duty, and the importer can claim it as input tax credit if they are a registered business. This puts an imported product on the same tax footing as one made in India.

Exports are zero-rated. An exporter can ship without paying IGST under a Letter of Undertaking or bond, or pay IGST and claim a refund. Either way, no GST should remain as a cost on exported goods, which keeps Indian products competitive abroad.

Supplies to special economic zones are also treated as inter-state and are zero-rated in the same way, even when the zone is in the same state as the supplier.

IGST is the piece of GST that follows goods across state lines. Fix the inter-state test and the credit order, and the rest of GST becomes much easier.

IGST Full Form: Common Questions