What is intra state in GST

According to Section-8 of IGST Act 2017,

(1) Subject to the provisions of section 10, supply of goods where the location of the supplier and the place of supply of goods are in the same State or same Union territory shall be treated as intra-State supply:

Provided that the following supply of goods shall not be treated as intra-State supply namely:-

(i) supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit;

(ii) goods imported into the territory of India till they cross the customs frontiers of India; or

(iii) supplies made to a tourist referred to in section 15.

(2) Subject to the provisions of section 12, supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as intra-State supply:

Provided that the intra-State supply of services shall not include supply of services to or by a Special Economic Zone developer or a Special Economic Zone unit.

Explanation 1.-For the purposes of this Act, where a person has,-

(i) an establishment in India and any other establishment outside India;

(ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or

(iii) an establishment in a State or Union territory and any other establishment registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons.

Explanation 2. - A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as having an establishment in that territory.

Example: ABC ltd. is located in Indore, Madhya Pradesh supplies LED Lamps worth Rs. 1,00,000 to another entity located in Bhopal, Madhya Pradesh. The GST is charged at 18%, which is apportioned as 9% CGST and 9% SGST.

GST Calculation:

GST Amount = Invoice Value * GST Rate = Rs. 1,00,000 * 18% = Rs. 18,000/-

CGST Amount = GST Amount / 2 = Rs. 18,000 / 2 = Rs. 9,000/-

SGST Amount = GST Amount / 2 = Rs. 18,000 / 2 = Rs. 9,000/-

The dealer collects a total of Rs. 18,000 as GST from the customer. Out of this amount:

Rs. 9,000 is paid as CGST to the Central Government.

Rs. 9,000 is paid as SGST to the Madhya Pradesh State Government.

This calculation is done for an intra-state supply, where both CGST and SGST are applicable. In case of an inter-state supply, Integrated GST (IGST) would be applicable at the same rate of 18%, and the total tax amount collected would also be Rs. 18,000/-. However, in the case of IGST, the tax is paid to the Central Government, and it is then distributed to the respective state governments as per the GST law.

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