CMA Intermediate · Direct and Indirect Taxation · Charge of Tax including Reverse Charge
As per the IGST Act, 2017, what is the maximum rate of integrated tax that may be notified on inter-State supplies, and on what value is it charged?
IGST on inter-State supplies may be notified at rates not exceeding forty per cent, and it is charged on the value determined under section 15 of the CGST Act, 2017, as stated in section 5(1) of the IGST Act.
- A20%, on the value under section 15 of the CGST Act
- B40%, on the value under section 15 of the CGST ActCorrect
- C40%, on the transaction value agreed in the contract only
- D20%, on the value under the Customs Act in all cases
Explanation
Section 5(1) of the IGST Act permits rates not exceeding 40% on the value determined under section 15 of the CGST Act. The 20% ceiling is for CGST. The customs-value route applies only to imported goods under the proviso.
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