5. How will Inter-state transactions work in GST?

For inter-state transactions, the Centre will levy Integrated GST (IGST), which is equal to the average of the CGST and SGST rates. After applying IGST, CGST and SGST credits received from purchases, the seller will then pay the remaining IGST on the added value. After this, the selling state would transfer its SGST credits provided when it paid the IGST to the Centre. The supplier is then entitled to IGST credits while selling in his state. The Centre then transfers the IGST credits to the buying state when it pays the SGST. The Central Agency will verify the tax claims and will notify the appropriate state governments when to transfer funds.