Determination of Inter and Intra State Supplies under GST Regime

Determination of Inter and Intra State Supplies under GST:  The taxable event in GST is supply of goods or services or both. Various taxable events like manufacture, sale, rendering of service, purchase, entry into a territory of State etc. have been done away with in favour of just one event i.e. supply. The constitution defines “goods and services tax” as any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption.

The Central and State governments will have simultaneous powers to levy the GST on intra-state supply. However, the Parliament alone shall have exclusive power to make laws with respect to levy of goods and services tax on inter-state supply.

Determination of Inter and Intra State Supplies under GST

As per Section 5 of IGST Act, Integrated Goods and Service Tax (IGST) will be levied on all inter-state supplies of goods or services or both.

As per Section 9 of CGST Act, Central Goods and Service Tax (CGST) will be levied on all intra-state supplies of goods or services or both.

Similarly, As per Section 9 of SGST Act of the all States, State Goods and Service Tax (SGST) to be levied on all intra-state supplies of goods or services or both.

So, it is necessary to determine a supply whether it is Inter-state supply or Intra-state supply.

Inter State Supply

The following supplies are considered as Inter-state supply:

For the supply of goods or services, where the location of the supplier and the place of supply are in –

  • two different states
  • two different union territories
  • in a state and a union territory

Supply of goods imported into the territory of India, till they cross the customs frontiers of India

Supply of services imported into the territory of India

Supply of goods or services or both –

  • When the supplier is located in India and the place of supply is outside India
  • Supplies to or by a Special Economic Unit or Developer
  • All other supplies which are made in the taxable territory, not being Intrastate supplies and not covered in the section

Intra State Supply

The following supplies are considered as Intra-state supply:

For the supply of goods or services, where the location of the supplier and the place of supply are in

  • In the same state
  • In the same union territory

The following supplies are not considered as Intra-state supply:

  • Supply of goods or services to or by a Special Economic Zone Unit or Developer
  • Goods imported into the territory of India till they cross the customs frontiers of India
  • Supplies made to a tourist referred in section 15 – Integrated tax paid, on the goods taken out of India, by a tourist while leaving India, will be refunded subject to the condition that he is not resident of India

Author – M.Udaya Chandran, M.Com

Recommended Articles