GST Interstate vs Intrastate

GST Interstate vs Intrastate Supply Meaning

GST Interstate vs Intrastate Supply Meaning

In GST, the terms interstate and intrastate have tremendous significance in the determination of IGST, CGST or SGST. Interstate supply attracts IGST, while intrastate supply attracts CGST and SGST. In this article, we look at the definition of interstate supply and intrastate supply as per the GST Act.

What is Interstate Supply?

Under GST, the supply of goods or services from one state to another would be called interstate supply. The GST Act defines interstate supply as when the location of the supplier and the place of supply for the customer are in:

  • Two different States; or
  • Two different Union territories; or
  • State and a Union territory.

In addition to the above, the supply of goods imported into India, till they cross the customs station is also classified as interstate supply. Also, the supply of goods or services to or by a Special Economic Zone developer or a Special Economic Zone unit is classified as interstate supply.

Click here to read on GST Refund – Supply to SEZ

What is Intrastate Supply?

Under GST, the supply of goods or services within the same state or Union territory is called an intrastate supply. However, the supply of goods or services to a Special Economic Zone developer or Special Economic Zone unit situated within the same state would not be intrastate supply. As any supply of goods or services to a Special Economic Zone developer or Special Economic Zone unit is classified as interstate supply.

GST Interstate vs Intrastate Supply
GST Interstate vs Intrastate Supply

GST Interstate vs Intrastate Supply

Under GST, interstate supply attracts Integrated Goods and Services Tax or IGST. Intrastate supply attracts both Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST). In the case of intrastate supply, the GST rate for the goods or services would remain the same. However, the GST rate and tax amount shall divide equally into two heads namely SGST and CGST.

For example, if an electronics store in Maharashtra sells a laptop worth Rs.1,00,000 to a customer in Karnataka and the sale shall attract a GST rate of 18%. The invoice for the sale shall add Rs.18000 along with the total value of the product. In the case where an electronics store in Maharashtra sells the laptop to a customer in Maharashtra, then the invoice shall reflect CGST of Rs.9000 and SGST of Rs.9000 along with the total value of the product.

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