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) has 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.
What is 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 Intra-state supplies and not covered in the section
What is 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
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