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Types of Supply on which GST is Leviable under GST in India

Under GST, the tax has been levied on the following kinds of supply of goods and services: 

(1)       Intra-State supply 

(2)       Inter-State supply 

Supply in the above case can be of goods or services or both. 

Intra-State supplies is subject to: 

(a)       Central Goods and Services Tax (CGST)  and 

(b)       State Goods and Services Tax (SGST) or Union Territory Goods and Service Tax (UTGST), as the case  may be. 

CGST is governed by the CGST Act, 2017, SGST is governed by respective SGST Act of the States and  UTGST is governed by UTGST Act, 2017. 

On the other hand, Inter-State supplies is subject to IGST and governed by the IGST Act, 2017. 

In fact, tax liability in both the cases shall be the same as CGST + SGST/UTGST shall be equal to IGST. 

If the supply is Intra-State, the CGST+SGST/UTGST is required to be collected and paid by the supplier.  Whereas, if the supply is Inter-State, the IGST is required to be collected and paid by the supplier. However, in  certain cases, tax is paid by the recipient under reverse charge.

1. Levy of GST on Intra-State Supply  

GST is a dual levy where— 

— the Central Government levies and collects tax in the form of central goods and services tax [CGST] 

And

— the State Government/Union Territory levies and collects tax in the form of State goods and services tax  [SGST]/ union territory goods and service tax (UTGST) 
on intra-State supply of goods or services or both. 

Intra-State supply of goods or supply or services have been defined separately in section 8 of the  Integrated Goods and Services Tax Act, 2017. 

(A) Meaning of Intra-State Supply of Goods [Section 8(1) of the IGST Act] 

(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 

— the same Union territory 

shall be treated as Intra-State supply. 

However, the following supply of goods shall not be treated as Intra-State supply:— 

  1. supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit; 

  2. goods imported into the territory of India till they cross the customs frontiers of India; or 

  3. supplies made to a tourist referred to in section 15.

(B) Meaning of Intra-State Supply of Services [Section 8(2) of IGST Act] 

Subject to the provisions of section 12, supply of services where the location of the supplier and the place of  supply of services are in the same State or same Union territory shall be treated as intra-State supply: 

However, the intra-State supply of services shall not include supply of services to or by a Special Economic  Zone developer or a Special Economic Zone unit.
Thus, in the case of intra-State supply of goods or services, both— 

  1. the Central Government and 

  2. the State Government/Union Territory 

shall levy GST at a prescribed rate which is presently divided into two parts. 50% of the GST rate prescribed shall  be known as CGST and the balance 50% shall be known as SGST/UTGST.

2.      Levy of GST on Inter-State supply 

In this case, GST is a single levy where the Central Government imposes integrated tax called as integrated  goods and services tax [IGST] on supply of goods or supply of services or both in the course of inter-State  trade or commerce.

However, integrated goods and services tax (IGST), so collected by the Central Government, shall be  apportioned between the Central Government and the State Governments/Union Territories in the manner  prescribed. 

Inter-State supply of goods or supply of services have also been defined separately in the section 7 of the  Integrated Goods and Services Tax Act, 2017. 

(A) Meaning of Inter-State Supply of Goods [Section 7(1)] 

Subject to the provision 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. 
Further, as per section 7(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.

(B) Meaning of Inter-State supply of Services [Section 7(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. 
Further, as per section 7(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.
Further, section 7(5) defines supply of goods or services or both in the course of Inter-State trade or  commerce. 

(C) Meaning of Supply of Goods or Services or Both in the course of Inter-State Trade or Commerce [Section  7(5)] 

Supply of goods or services or both in the following cases shall be treated to be a supply of goods or  services or both in the course of inter-State trade or commerce: 

(a) when the supplier is located in India and the place of supply is outside India; 

(b) supply of goods or services or both to or by a Special Economic Zone developer or a Special  Economic Zone unit; or 

(c) supply of goods or services or both in the taxable territory, not being an intra-State supply and not  covered elsewhere in this section,
 
Supply of Goods or Services or Both under GST (Goods and Service Tax) in India GST - Ready Reckoner in India Levy and Collection of GST under CGST Act, IGST Act and UTGST Act.
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