GST, or the Goods and Services Tax, was first introduced in India on July 1st, 2017. Interstate and intrastate GST are the most important components of GST as it helps one determine whether IGST, CGSST, or SGST is to be paid. Whether a supply is considered interstate or intrastate depends on the location of the supplier and the place of supply.
Meaning of Intra-State and Inter-State Supply under GST
GST as the name suggests Goods and Services Tax is applicable on the supply of goods or/and services. These supplies can be classified into two categories
- Inter-State Supplies
- Intra-State Supplies
Meaning of Inter-State Supply
As per GST Act, inter-state supply is when the location of the supplier and the place of supply are in different states. In simple words, inter-state supply means supplying goods or/and services from one state border to another. In the case of inter-state supplies, the taxpayer is liable to pay Integrated Goods and Services Tax (IGST) that is collected by the Central Government. Example of Inter-state supply: supply of raw material from Punjab to Delhi.
Interstate Supply Applicability
- Inter-state is applicable on the domestic supply means when the place of supplier and the place of supply are:
- Two different states;
- Two different regions under one Union Territory; or
- State and a UT
- Inter-state supply includes the goods or/and services imported into India;
- Inter-state supply also includes the goods or/and service supplied from or special economic zone (SEZ) or export-oriented unit (EOU);
Meaning of Intra-State Supply
As per GST Act, intra-state supply is when the location of the supplier and the place of supply is in the same states. In simple words, intra-state supply means supplying goods or/and services within a state border. In the case of intra-state supplies, the taxpayer is liable to pay Central Goods and Services Tax (CGST) or States Goods and Services Tax (SGST). Here CGST is collected by the Central Government and SGST is collected by the State government. Example of Intra-state supply: supply of finished from Nehru Place to Lajpat Nagar (within Delhi border).
Intra-State Supply Applicability
Intra-State supply is applicable when the goods or/and services are supplied with in the same:
- State
- Union Territory
Difference between Intra-State Supply and Inter-State Supply
| S.No | Parameters | Inter-State Supply | Intra-State Supply |
| 1 | Applicability | When the location of the supplier and place of supply is in two different states. | When the location of the supplier and place of supply is in the same state or union territory. |
| 2 | Tax Levied | Integrated Goods and Services Tax (IGST) | Central Goods and Services Tax (CGST); and State Goods and Services Tax (SGST) or Union Territory Goods and Services Tax (UTGST) |
FAQs
How will the GST be charged for intrastate supply and billing in another state?
Both Central Goods and Service Tax (CGST) and State Goods and Service Tax (SGST) is applicable for Intrastate supply. The rates of GST would remain the same for the goods or services but the GST rate and the tax amount will be divided equally under two heads namely the SGST and CGST.
What is intrastate and interstate in GST?
Intrastate GST is the GST levied on the supply of goods and services within the same state or union territory whereas the interstate GST is levied on the supply of Goods and Services from one state to another state or union territory.