# Inter-State vs Intra-State Supply

Under GST, the nature of supply (whether inter-State or intra-State) determines which tax is levied:

Inter-State supply → IGST is charged
Intra-State supply → CGST + SGST/UTGST are charged

## Two Key Reference Points

Every supply has two location coordinates to compare:

1. Location of Supplier

2. Place of Supply

## Section 7 — Inter-State Supply

A supply is inter-State when:

Location of Supplier AND Place of Supply are in different States / Union Territories.

## Section 8 — Intra-State Supply

A supply is intra-State when:

Location of Supplier AND Place of Supply are in the same State / UT.

## Special Rule — Services Provided on Board / Coastal Line

Where services are supplied in the territorial waters:

The location of the supplier OR place of supply, as applicable, shall be deemed to be in the coastal State / UT where the nearest point of the appropriate baseline is located.

## Quick Decision Framework

Location of Supplier	Place of Supply	Nature	Tax
State A	State A	Intra-State	CGST + SGST
State A	State B	Inter-State	IGST
State A	UT	Inter-State	IGST

Worked example

### Example 1

Example: Mr. X (registered in Maharashtra) supplies goods to Mr. Y in Maharashtra. Location of supplier = Maharashtra; Place of supply = Maharashtra. Same State → Intra-State supply → CGST + SGST applicable.

### Example 2

Example: A consultancy firm based in Delhi provides services to a client whose place of supply is determined to be Karnataka. Different States → Inter-State supply → IGST applicable.

⚠️ Common exam mistakes

Confusing 'location of recipient' with 'place of supply' — these are not always the same; place of supply is determined by specific rules under Sections 10–13.
Applying CGST+SGST when supplier and recipient are in the same State, without verifying that the place of supply is also in that State.
Forgetting that supplies to/from a Union Territory are also inter-State when crossing State/UT borders.

Bare-Act text Sections 7 & 8 · IGST Act, 2017 · click to expand

Section 7(1) of IGST Act: Subject to the provisions of section 10, supply of goods, 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, shall be treated as a supply of goods in the course of inter-State trade or commerce. Section 8(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.

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Inter-State vs Intra-State Supply (Section 7 & 8 of IGST Act)

Worked example

⚠️ Common exam mistakes