Explanation: In India, the Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services. It is divided into three categories: CGST (Central GST), SGST (State GST), and IGST (Integrated GST). CGST and SGST are applicable for intra-state transactions, where both the supplier and the recipient are within the same state. IGST, on the other hand, is applicable for interstate transactions, where the supplier and the recipient are in different states.
In the given scenario, dealer A in Maharashtra is selling goods to dealer B in Kerala. This is an interstate transaction, and therefore, IGST is applicable. The IGST rate is the same as the combined CGST and SGST rate. In this case, the GST rate is 10%, so the IGST rate is also 10%.
To calculate the IGST payable, we use the following formula:
\[ \text{IGST} = \text{Sale Price} \times \text{IGST Rate} \]
Given:
- Sale Price (SP) = 1000
- IGST Rate = 10%
Substituting the values into the formula:
\[ \text{IGST} = 1000 \times 10\% = 1000 \times 0.10 = 100 \]
Therefore, the IGST payable by dealer B to dealer A is 100.
It is important to note that IGST is a single levy that replaces both CGST and SGST in interstate transactions. This simplifies the tax structure and ensures that the tax is levied only once on the entire value of the transaction, avoiding the cascading effect of taxes.
In summary, for interstate transactions, IGST is the applicable tax, and it is calculated based on the sale price and the IGST rate, which is the same as the combined CGST and SGST rate. In this case, the IGST payable is 100.