The Full form of IGST is Integrated Goods and Services Tax. Integrated GST (IGST) is applicable on interstate (between two states) transactions of goods and services which are taxable, as well as on imports of goods and services. This tax will be collected by the Central government and will further be distributed among the respective states. IGST is charged when a product or service is moved from one state to another. IGST is in place to ensure that a state has to deal only with the Union government and not with every state separately to settle the interstate tax amounts. Let’s try to understand IGST with an example; Suppose Ramesh is a trader in Punjab who sold goods worth Rs 1,000 to Suresh in Rajasthan. Since it is an interstate transaction, IGST will be applicable here. Let’s assume the GST rate is 18% for the particular item. So, the IGST amount charged by the Central Government will be Rs 180 (18% of Rs 1,000), and the refined rate of the product will be Rs 1,180. Now, GST is a consumption tax that means only the state where the goods are actually consumed will get the tax benefits, irrespective of the manufacturing state.