Difference Between GST Interstate Supply and Intrastate Supply?

In the determination of IGST, CGST and SGST, there is huge significance of the terms interstate and intrastate when dealing with GST. Interstate supplies are related to IGST and intrastate supplies are related to SGST and CGST. In this blog, we will go through interstate supply and intrastate supply in detail as per the GST Act.

GST Interstate Supply

The supply of goods and services from one state to another state is known as GST Interstate supply. According to the GST Act, a supply of goods and services will be considered as Interstate Supply when the location of the customer and the supplier are in one of the following:

• Two different State
• Two different union territories
• A state and a union territory or vice versa.

Moreover, those goods that are imported in India, their supply is also categorised as interstate supply till they reach the customer stations. In addition to that,  when the goods and services are supplied either to or by a Special Economic Zone developer or a Special Economic Zone Unit, then that kind of supply is also categorised as interstate supply.

GST Intrastate Supply

The supply of goods and services that is done under the same state or Union Territory is considered as an intrastate supply under GST. But the supply of goods and services that is done either to a Special Economic Zone developer or Special Economic Zone unit that is located in the same state will not be categorised as an intrastate supply. This is because all the supplies of goods and services that are made to a Special Economic Zone developer or a Special Economic Zone unit are considered to be interstate supply.

Difference Between Inter and Intrastate Supply under GST

Interstate supply is related to IGST (Integrated Goods and Services Tax) whereas Intrastate supply is related to CGST (Central Goods and Services Tax) or SGST (State Goods and Services Tax), under the GST. When we talk about intrastate supply of goods and services, then we must remember that the GST rate for goods and services will remain the same. Whereas the amount of GST rate and tax will be divided equally into the SGST and CGST.

For instance, in case an electronics store in Mumbai sells a laptop worth Rs. 1 Crore to a customer who resides in Delhi and a GST at the rate of 18% is applicable on the sale. Then, an amount of Rs. 18000 will be added in addition to the actual cost of the product to the invoice for the sale of that laptop. However, if the supplier of laptops has to sell a laptop within Mumbai, then the invoice will show Rs. 9000 as CGST and will show an amount of Rs. 9000 as SGST in the invoice in addition to the actual value of that product.

Conclusion

In this blog, we learnt about interstate supply and intrastate supply of goods and services under GST in detail. We also came to know about the differences between the two and the types of GST they attract like SGST and CGST are attracted by intrastate supply while IGST is attracted by Interstate supply.