GST Interstate vs Intrastate Supply Meaning

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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 GST Act.

What is Interstate Supply?

Under GST, supply of goods or services from one state to another would be called as 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, supply of goods or services to or by a Special Economic Zone developer or a Special Economic Zone unit is classified as interstate supply.

What is Intrastate Supply?

Under GST, supply of goods or services within the same state or Union territory is called as intrastate supply. However, 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 intrestate 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 are divided equally into the two heads namely SGST and CGST.

For example, if a Rs.1,00,000 worth laptop is sold by an electronics store in Maharashtra to a customer in Karnataka and the applicable GST rate is 18%, then Rs.18000 IGST would be applicable. If the laptop is sold by an electronics store in Maharashtra to a customer in Maharashtra, then CGST or Rs.9000 and SGST or Rs.9000 would be applicable.

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Comments (1)

K Kumar

Aug 11, 2017 at 10:49 PM

Sir,
We act as commission agents.

We receive commission from two sources.

1. Import Indenting commission which is paid by the foreign supplier directly to our bank. No Billing for the Goods is made by us ,we only act as commission agents. The total commission in a year is below four lakhs

2. We act as commission agents for Indian parties for for supply of their Goods to different customers. Here also no billing is done by us as supplies are made directly to the customers by the manufacturer/suppliers. Our role is only to procure orders and do the Liasion. Our suppliers are from different States of India
The total earning is below five lakhs.

So the total commission earned in a year is below Ten Lakhs (1+ 2)

Kindly inform whether

(a) we require registration under GST

(b) Whether GST is applicable for the commissions received from Foreign supplier and if so at what rate. Foreign suppliers are not regitered under GST as they are not an INDIAm Company

(c) Whether GST is applicable for the commissions received from Indian Parties as mentioned in 2 above.

Looking foreward to have your valued guidance in the matter in order to proceed further.

Best Regards

Reply

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