Zoho Books compares your registered state with the customer’s billing state. If they differ, it is an inter-state supply and Zoho Books applies IGST at the full rate. A Pune (Maharashtra) company selling to a Bengaluru (Karnataka) company at 18% GST will see 18% IGST on the invoice, not 9% CGST and 9% SGST. The IGST amount is posted to “IGST Output Tax Payable” and goes to the central government, which then apportions it to the destination state.
IGST is also levied on the import of goods into India, calculated on the customs value plus customs duty. Exporters, conversely, supply goods under zero-rated treatment: they charge 0% IGST on exports but can claim refunds of ITC paid on inputs. Zoho Books supports both import IGST recording (through the “Import of Goods” tax treatment on vendor bills) and export invoices with zero-rated treatment, generating the correct GSTR-1 sections for each.
IGST ITC is the most flexible of the three ITC types. It can be used to offset IGST Output Tax Payable first, then CGST Output Tax Payable, and then SGST Output Tax Payable. Zoho Books applies this set-off priority automatically in the GST Summary report, maximising ITC utilisation and minimising the cash outflow for each GST return filing.
IGST (Integrated Goods and Services Tax) is the tax applied on inter-state supplies and imports, equal to the combined CGST and SGST rate. Zoho Books applies it automatically when the supplier and recipient are in different Indian states.
Zoho Books applies IGST at the full combined rate when the customer’s state differs from your organisation’s registered state. The entire IGST amount is posted to an IGST Output Tax Payable liability account.
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