Significance of Inter state and intra state supplies in GST

In the GST regime there are two type of supplies. The tax you need to pay will be decided by the type of supply. A supply can be inter state or intra state supply. Section 7 of IGST Act provide for inter state and intra state supplies. You need to determine the nature of supply before charging the tax. The tax you need to pay is dependent on nature of supply. There are easy rules to find the nature of a supply.

How to determine an Inter state and intra state supply: 

Section 7 of IGST Act provide for inter state and intra state supplies: 

(1) Subject to the provisions of section 10, supply of goods, where the location of
the supplier and the place of supply are in––
(a) two different States;
(b) two different Union territories; or
(c) a State and a Union territory,
shall be treated as a supply of goods in the course of inter-State trade or commerce.

(2) Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce.

(3) Subject to the provisions of section 12, supply of services, where the location of
the supplier and the place of supply are in––
(a) two different States;
(b) two different Union territories; or
(c) a State and a Union territory,
shall be treated as a supply of services in the course of inter-State trade or commerce.

(4) Supply of services imported into the territory of India shall be treated to be a supply of services in the course of inter-State trade or commerce.

(5) Supply of goods or services or both,––
(a) when the supplier is located in India and the place of supply is outside India;
(b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or
(c) in the taxable territory, not being an intra-State supply and not covered elsewhere in this section,

shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce.