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Short guide to GST Interstate and Intrastate Supply | Company Vakil

To further understand GST one needs to know the importance of interstate and intrastate in GST. The interstate and intrastate supply helps to determine whether it’s IGST, CGST or SGST.

The interstate supply and the intrastate supply have a little difference in their applications. For instance, while interstate supply attracts IGST, the intrastate supply, on the other hand, attracts CGST and SGST.

We will define both GST supply according to the GST Act in this article.

What is Interstate Supply?

Interstate supply refers to the supply of goods and services from one state to another. According to the GST Act, interstate supply is defined as the supplier’s location while the customers reside in:

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

Additionally, goods imported into India are regarded as interstate supply until they cross the customs station. Also, goods supplied to or by a Special Economic Zone unit is termed as interstate supply.

What is Intrastate Supply?

Intrastate supply is referred to the supply of goods or services within the same state or Union territory. Conversely, goods supplied or services to a Special Economic Zone developer located inside the same state is not termed as intrastate supply.

GST Interstate versus Intrastate Supply

As earlier mentioned, interstate supply attracts IGST while intrastate supply attracts both CGST and SGST which are acronyms for Central Goods and Services Tax and State Goods and Services Tax respectively.

For the intrastate supply, the GST rate for the goods or services remains unchanged. However, the tax amount and the GST rate will be equally divided equally into the two main sections namely SGST and CGST.

For example, if a laptop worth Rs.1, 00,000 is sold in a store located in Maharashtra while the customer resides in Karnataka. If the GST rate applicable is 18%, then Rs.18000 IGST would be charged. However, if the laptop is sold to a customer who also resides in Maharashtra, then or Rs.9000 CGST charges and Rs.9000 SGST would be applicable.

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