Interstate sale composition scheme

As per section 10 of CGST Act

The registered person shall be eligible to opt under sub-section (1), if––

(a) he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II;

(b) he is not engaged in making any supply of goods which are not leviable to tax under this Act; 
(c) he is not engaged in making any inter-State outward supplies of goods;

(d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; and

(e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council:

As per above provision to A Composition Dealer can't make Inter State Supply.

One of the conditions under Composition scheme is that he cannot make inter-state supplies. However, if you can justify that POS falls in the same state where supplier has registration, then it shall not be an 'inter-state' supply rather it shall be an 'intra-state' supply though customer does not belong to such state. For example, Mr. A (customer) from Gujarat went to Mr. B (supplier) in Karnataka for purchase of some goods. Assume that these are counter sales. In such case, POS is Karnataka. Since POS and Supplier fall in same state, it shall be an 'intra-state' supply but not 'inter-state' supply. Hope it is clear!

Read more at: https://www.caclubindia.com/forum/inquiry-for-other-state-supply-456767.asp