Question

What is meant by ‘Inter-State Supply’ ?

Hint:

Inter-State supply means the supplier and the place of supply are in different States or Union Territories, and it is taxed with IGST.

Answer 1

Step 1: Understanding the Concept:
Under GST, a supply is either intra-State or inter-State. This is decided by comparing two places: the location of the supplier and the place of supply.

Step 2: Definition of Inter-State Supply:
Under Section 7 of the IGST Act, 2017, a supply is inter-State when the location of the supplier and the place of supply are in two different States or Union Territories.
For example, a dealer in Delhi sells goods to a buyer in Punjab. The goods move from one State to another, so this is an inter-State supply.

Step 3: Other cases treated as inter-State supply:
Import of goods or services into India is an inter-State supply. Export of goods or services is also an inter-State supply. A supply to or by a Special Economic Zone developer or unit is treated the same way.

Step 4: Tax charged:
On an inter-State supply, the tax charged is Integrated GST (IGST). It goes to the Centre first and is then shared with the destination State.

Final Answer:
Inter-State supply is a supply where the supplier and the place of supply are in different States or Union Territories. It attracts IGST.