All you need to know on  Inter-State Supply and Intra State Supply Under GST

Whether a supply is classified as an Intra State GST or Inter-State Supply is determined by the location of the supplier and the location of the supplied. The nature of the supply must be determined in order to determine whether integrated tax or Central plus State tax must be paid. The term “Inter-State Supply of Products” refers to a supply of goods where the supplier and the recipient are in different states or union territories.

Intra-State delivery of products, on the other hand, refers to goods delivered to a location within the same State or Union area as the supplier. In this article information such as “What is an Intrastate supply?”, “What is an Inter-State Supply?”, Intrastate vs Interstate will be included.

What is an Interstate supply?

When the provider and the place of supply are in different states, this is referred to as inter-state supply. The transaction is also presumed to be Inter-State when goods or services are exported or imported, or when products or services are supplied to or by an SEZ unit.

What is an Intrastate Supply?

Intra State supply of products or services occurs when the supplier’s location and the place of supply, i.e., the buyer’s location, are both in the same state. A vendor must collect both CGST and SGST from the customer in intra-state transactions.

Point to remember for Inter-State Supply

• As per the GST Act, Inter stat supply means the transportation of goods or services between the state and union territory.
• Before they reach the customs station, products delivered to India are frequently referred to as an Inter-State Supply.
• Inter-State Supplies are the transportation of products and services from or to an exclusive economic zone or a specific development zone.

Points to remember for Intra State Supply

• A seller must collect both the State Goods and Services Tax (SGST) and the Central Goods and Services Tax (CGST) from a buyer in Intra State Supply.
• This stipulates that if the supplier’s and buyer’s positions are both located within the same State, the supply is considered an Intra State Supply.
• The Central Goods and Services Tax (CGST) is to be placed with the federal government, while the State Goods and Services Tax (SGST) is to be deposited with the state government.

Intra state GST vs Inter state GST

• The Integrated (GST)Goods and Services Tax, or IGST, is imposed on interstate supplies under the GST.
• An intra-state supply is subject to both the CBT and the State Goods and Services Tax (SGST).
• The GST rate for products and services sold within the state would stay unchanged.
• The GST and tax rate, on the other hand, will be shared evenly between two headings: SGST and CGST.
• Different taxes are charged on different commodities or services depending on the supply location under the current GST law.
• If the transaction is an intra-state supply of goods and services, the Center of Commerce collects the central GST (CGST) and the State GST (SGST) is collected by the state where the supply takes place.
• The Centre collects integrated GST on interstate supplies of goods and services (IGST). In this instance, no CGST or SGST will be applied.
• The IGST rate will be equal to the sum of the CGST and the SGST.

FAQs on Intra State GST and Inter-State GST

1. How will the GST be calculated for Intrastate Supplies and Billing in a different State?

Intrastate supplies are subject to both the Central Goods and Service Tax (CGST) and the State Goods and Service Tax (SGST). The GST rates for goods and services will remain the same, however, the GST rate and tax amount will be split evenly between two headings, SGST, and CGST. 

2. If I have an Interstate Supply of Products, what GST taxes must I pay?

The central government deposits an integrated Goods and Services Tax in the case of an interstate supply of goods and services (IGST). In this instance, CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) will not be applied.

3. What is the difference between Interstate and Intrastate Supplies?

Inter-state and intra-state supplies are specified in Sections 7 and 8, respectively, of the IGST Act. Intra-state supplies occur when the supplier’s location and the location of supply are both in the same state, while inter-state supplies occur when they are in separate states. 

4. How would GST affect Intra-State Transactions?

On every transaction of taxable supply of goods and services on an intra-state basis, the Central GST (CGST) and State GST (SGST) shall be imposed simultaneously. Furthermore, both would be beneficial.  It is imposed on the same price or value calculated in accordance with section 15 of the CGST Law.

5. How will Interstate Transactions be taxed?

The Integrated GST (IGST) would be charged on every taxable supply of goods transaction & services provided on an interstate basis. It would also be based on the same price or value. Calculated in accordance with Section 15 of the CGST Law.

Conclusion 

Intrastate GST is imposed on the supply of goods and services within a single state or union territory, whereas Interstate GST is imposed on the supply of goods and services from one state to another. The GST is one of the most beneficial tax reforms in Indian history, with both short- and long-term rewards and downsides.