🧭 What Is Inter-State Supply?
As per Section 7 of the IGST Act, a supply is Inter-State when:
➡️ Location of supplier and place of supply are in different States / Union Territories
➡️ Supply is to or by an SEZ Unit/Developer
➡️ Import or Export of goods/services
➡️ Supply to International tourists
➡️ Any supply in the course of inter-State trade or commerce
🧾 Inter-State Supply = IGST 👈
When supply is inter-State ➡️ IGST is levied, which is later shared between Centre & Destination State.
No CGST + SGST combo here! ❌➕✅
🧪 Example 1:
A supplier in Delhi sells goods to a buyer in Mumbai 🏢
📍 Location of supplier = Delhi
📍 Place of supply = Maharashtra
👉 Inter-State Supply → IGST applies
🚩 When Else Is Supply Treated as Inter-State?🔍
1️⃣ Supplier & Recipient in Different States/UTs 🌐
🧪 Example 2:
Mr. A (Gujarat) supplies software services to Ms. B (Rajasthan)
📍POS ≠ Location → IGST applies
2️⃣ Import of Goods/Services 🌊📦
📜 IGST is charged in addition to Customs Duty
🧪 Example 3:
Import of laptop from USA to Delhi
📍POS = India → IGST paid by importer at customs
3️⃣ Export of Goods/Services ✈️🌍
🟢 Exports = Inter-State, but are Zero-rated
🧾 Claim refund of ITC or pay IGST and claim refund
🧪 Example 4:
A Jaipur-based exporter sends handicrafts to France
📍POS = France → Zero-rated Inter-State Supply
4️⃣ To/By SEZ Unit or SEZ Developer 🏢
✅ Always Inter-State
Even if both parties are in the same State!
🧪 Example 5:
Company in Hyderabad sells software to SEZ in same city
📍Still Inter-State → IGST applies
5️⃣ Inter-State Branch Transfers (with separate registrations) 🔄
🧾 Supply between distinct persons under the same PAN = Taxable
🧪 Example 6:
XYZ Ltd. (Registered in Delhi & Haryana) sends stock from Delhi to Haryana
📍Even without consideration → Inter-State supply → IGST payable
6️⃣ Tourist Exemption on Imports 🧳
Goods imported by non-residents leaving India = Treated as Inter-State export
📍POS = Outside India → Zero-rated
🧪 Example 7:
Tourist buys camera in Mumbai and leaves for UK
📍POS = UK → Export → GST exempted under tourist refund scheme (when applicable)
⚖️ Key Legal Sections to Remember
📘 Section 7 of IGST Act = Inter-State Supply
📘 Section 10 & 12 of IGST Act = Place of Supply Rules
📘 Section 2(56) CGST Act = Definition of India (includes UTs, waters, etc.)
🧠 Quick Recap Table
| Supply Scenario | Inter-State? | Tax Type 🔍 |
|---|---|---|
| Supplier & recipient in different States | ✅ Yes | IGST |
| Import from outside India | ✅ Yes | IGST + Customs |
| Export to outside India | ✅ Yes | Zero-rated (IGST) |
| Supply to SEZ | ✅ Yes | IGST |
| Supply between different registrations (PAN) | ✅ Yes | IGST |
| Sale within same State | ❌ No | CGST + SGST |
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