What is the meaning of Inter-state supply under GST? 1


Section 7 of IGST Act 2017 specified situations when the supplies will be considered as Inter-State supply. Following listed are those situations when supplies will be considered as Inter-state trade or commerce:-

  • Where the location of the supplier and the place of supply are in––
    • two different States;
    • two different Union territories; or
    • 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;

  • Supply of goods or services or both to or by a Special Economic Zone developer or a Special Economic Zone unit;

  • Supply of goods or services or both in the taxable territory, not being an intra-State supply and not covered elsewhere in this section.

Whether every person supplying goods or services in the course of inter-state trade are required to get registered under GST?

Yes, as per Section 24(i) of CGST Act 2017, every person dealing in inter-state trade is required to get registered under GST without considering turnover threshold limit. However, from 13th October 2017 onwards, government through its notification IGST-10/2017 has exempted from registration to those persons who are making inter-state supply of Taxable SERVICES and having turnover (on all India Basis):-

  • less than Rs 20 lakh in a financial year; or
  • less than Rs 10 lakh in a finacial year in case of “special category states” as specified in Article 279A(4)(g), other than the State of Jammu and Kashmir.

After this notification being come into force, major beneficiaries are professionals and freelancers.


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