How are the inter state or intra state transactions identified?

The location of the supplier and the place of supply are used to identify whether a transaction is intrastate or interstate.

• Intrastate transaction is when the location of the supplier and the place of supply are in the same state. In intrastate transactions, a seller has to collect both CGST and SGST from the buyer. The CGST gets deposited with the Central Government and SGST gets deposited with the State Government.
• Interstate transaction is when the location of the supplier and the place of supply are in different states. In an interstate transaction, a seller has to collect IGST from the buyer. IGST is levied by the Central Government and is shared between the Central Government and the State Government where the supply is received.

Here are some examples of intrastate and interstate transactions:

• Intrastate transaction: A supplier in Delhi sells goods to a buyer in Delhi. The supplier will collect CGST and SGST from the buyer.
• Interstate transaction: A supplier in Delhi sells goods to a buyer in Mumbai. The supplier will collect IGST from the buyer.

It is important to correctly identify whether a transaction is intrastate or interstate as the applicable tax rates will vary.

Here are some factors that can be used to determine the location of the supplier and the place of supply:

• Location of the supplier: The location of the supplier is the place where the supplier is registered for GST.
• Place of supply: The place of supply is the place where the goods or services are delivered or consumed.

In some cases, the place of supply may not be the same as the location of the supplier. For example, if goods are sold online, the place of supply will be the location of the buyer.

If you are unsure whether a transaction is intrastate or interstate, you can consult with a GST expert.