The Goods and Services Tax (GST) has transformed India’s indirect tax system by bringing multiple taxes under one unified structure. One of the most important concepts that every business owner, accountant, and commerce student must understand is the concept of Intra-State supply under GST. Whether you are running a small business or pursuing a Taxation Course, knowing the meaning, tax rates, and compliance rules of Intra-State GST is essential.
In this comprehensive guide, we will explain the concept of Intra-State transactions in GST, including applicable tax rates, compliance requirements, and practical examples, clearly and straightforwardly.
What is Intra-State Supply in GST?
Intra-State supply refers to the supply of goods or services where the location of the supplier and the place of supply are within the same state or Union Territory.
Under the GST law, when both the supplier and buyer are located in the same state, the transaction is treated as an Intra-State supply, and CGST (Central GST) and SGST (State GST) are applicable.
Key Points of Intra-State Supply:
- Supplier and recipient are in the same state
- Place of supply is within the same state
- Tax charged: CGST + SGST
- IGST is not applicable
Understanding this concept is crucial for businesses while filing GST returns and maintaining proper compliance.
Taxes Applicable on Intra-State Supply
In an Intra-State transaction, GST is split into two components:
1. Central GST (CGST)
CGST is levied by the Central Government on intra-state supplies.
2. State GST (SGST)
SGST is levied by the State Government where the supply takes place.
Both CGST and SGST are charged simultaneously on the same transaction, but the revenue is shared between the central and state governments.
Intra-State GST Tax Rates
The GST tax rates for Intra-State supply are divided equally between CGST and SGST.
| Total GST Rate | CGST | SGST |
|---|---|---|
| 5% | 2.5% | 2.5% |
| 12% | 6% | 6% |
| 18% | 9% | 9% |
| 28% | 14% | 14% |
For example, if a product attracts 18% GST, the tax will be split as 9% CGST + 9% SGST.
Examples of Intra-State Supply in GST
Example 1: Sale of Goods
A trader in Kolkata, West Bengal, sells furniture to a customer also located in Kolkata.
- Supplier location: West Bengal
- Place of supply: West Bengal
- Type of supply: Intra-State
- Tax applicable: CGST + SGST
Example 2: Service Supply
A digital marketing agency in Mumbai provides services to a client in Pune, both within Maharashtra.
- Supplier location: Maharashtra
- Place of supply: Maharashtra
- Type of supply: Intra-State
- Tax applicable: CGST + SGST
These examples clearly show how Intra-State supply works in practical scenarios.
Intra-State Supply vs Inter-State Supply
| Basis | Intra-State Supply | Inter-State Supply |
|---|---|---|
| Location | Same state | Different states |
| Tax Applied | CGST + SGST | IGST |
| Government Revenue | Shared by Centre & State | Collected by Centre |
| GST Return Impact | CGST & SGST reporting | IGST reporting |
Understanding this difference helps businesses avoid errors while filing GST returns.
GST Registration Requirement for Intra-State Supply
Businesses involved in Intra-State supply must obtain GST Registration if their aggregate turnover exceeds the prescribed threshold limit.
Threshold Limits:
- ₹40 lakhs – for goods (₹20 lakhs in special category states)
- ₹20 lakhs – for services (₹10 lakhs in special category states)
However, certain businesses must register under GST regardless of turnover, such as:
- Casual taxable persons
- Input service distributors
- E-commerce sellers
Proper GST Registration ensures legal compliance and allows businesses to claim Input Tax Credit (ITC).
Compliance Requirements for Intra-State GST
Businesses making Intra-State supplies must comply with the following GST regulations:
1. Issuing GST-Compliant Invoices
Invoices must clearly mention:
- CGST and SGST separately
- GSTIN of buyer and seller
- HSN/SAC codes
2. Filing GST Returns
Regular filing of returns, such as:
- GSTR-1 (Sales details)
- GSTR-3B (Summary return)
3. Maintaining Records
Businesses must maintain:
- Sales and purchase records
- Tax invoices
- ITC details
Non-compliance may lead to penalties, interest, and legal issues.
Importance of Understanding Intra-State GST
Understanding Intra-State GST is important for:
- Business owners need to ensure accurate tax payments
- Accountants handling GST returns
- Students pursuing Income Tax and GST-related careers
Incorrect classification of supply can lead to wrong tax payment and loss of Input Tax Credit.
Role of Taxation Knowledge in Career Growth
Knowledge of GST concepts like Intra-State supply plays a vital role in building a successful career in accounting and taxation. Professionals with practical GST knowledge are highly demanded in:
- Accounting firms
- Corporate finance departments
- CA firms
- Tax consultancy services
Learning GST along with Income Tax through a professional Taxation Course enhances job opportunities and practical expertise.
Conclusion
Intra-State supply under GST is a fundamental concept that determines how taxes are charged and reported. When the supplier and place of supply are within the same state, CGST and SGST are applicable. Understanding tax rates, compliance requirements, and real-life examples helps businesses remain compliant and avoid costly errors.