Provisions under Section 7 of the Integrated Goods and Services Tax (IGST) Act, 2017 relating to “Inter-State Supply”, are as under:
Section 7 of IGST Act 2017: Inter State Supply (CHAPTER IV – DETERMINATION OF NATURE OF SUPPLY)
(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.
Note: CBEC notifies 01/07/2017 as the commencement date in respect of Sections 4 to 13, 16 to 19, 21 and 23 to 25 of the IGST Act, 2017, vide Notification 3/2017. |
Amendments History:
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Commentary on Section 7 of the IGST Act, 2017
Section 7 of the Integrated Goods and Services Tax (IGST) Act, 2017, is concerned with the determination of the nature of supply when it comes to inter-State supply. This section provides a set of rules for identifying when a supply of goods or services is considered an inter-State trade or commerce. The following commentary breaks down the key provisions of this section:
Section 7(1) of the IGST Act
A supply of goods is considered an inter-State trade or commerce if the location of the supplier and the place of supply fall under:
a) Two different States,
b) Two different Union territories, or
c) A State and a Union territory.
This provision is subject to Section 10, which deals with place of supply of goods.
Section 7(2) of the IGST Act
Imported goods are treated as inter-State trade or commerce until they cross the customs frontiers of India.
Section 7(3) of the IGST Act
Similar to sub-section (1), a supply of services is considered an inter-State trade or commerce if the location of the supplier and the place of supply fall under:
a) Two different States,
b) Two different Union territories, or
c) A State and a Union territory.
This provision is subject to Section 12, which deals with place of supply of services.
Section 7(4) of the IGST Act
Imported services are treated as inter-State trade or commerce.
Section 7(5) of the IGST Act
The following scenarios are also considered inter-State trade or commerce:
a) When the supplier is located in India, and the place of supply is outside India,
b) When the supply is made to or by a Special Economic Zone (SEZ) developer or an SEZ unit, and
c) In the taxable territory, when the supply is not an intra-State supply and not covered elsewhere in this section.
This section is crucial for understanding the tax implications in cases of inter-State supply, as IGST is applicable to such supplies.
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Note: The IGST Act 2017 has been notified vide GOI Notification dated 12/04/2017, which has subsequently been amended through IGST Extension to J&K Act 2017, IGST (Amendment) Act 2018. Finance Act 2019, Finance Act 2020, Finance Act 2021, Finance Act, 2022 and Finance Act, 2023, including various Notifications issued by the Govt./ CBIC from time to time, relating to the commencement dates of various Sections/ Provisions in the respective IGST/ Amendment Acts, wherever required. Information on this page is a Section-wise compilation of the Amendments made by various Notifications issued by CBIC from time to time, with best possible efforts for accuracy. In any case, E&OE. For official/ updated information, please visit CBIC website.
CBIC Updates (GST) |
Index of GST Circulars, Notifications, Press Releases, Orders, etc. issued by CBIC from 2017 and onwards along with Section-wise/ Rule-wise Text of GST Acts/ Rules: |
CGST: CGST Act/ Definitions, CGST Rules, GST Forms |
IGST: IGST Act/ Definitions, IGST Rules |
UTGST: UTGST Act/ Definitions, UTGST Rules |
GST Circulars (CGST/ IGST/ UTGST): 2023, 2022, 2021, 2020, 2019, 2018, 2017 |
GST Instructions: 2023, 2022, 2021, 2020, 2019, 2018, 2017 |
CGST Notifications: 2023, 2022, 2021, 2020, 2019, 2018, 2017 |
CGST Rate Notifications: 2023, 2022, 2021, 2020, 2019, 2018, 2017 |
IGST Notifications: 2022, 2021, 2020, 2019, 2018, 2017 |
IGST Rate Notifications: 2023, 2022, 2021, 2020, 2019, 2018, 2017 |
UT Tax/ UTGST Notifications: 2022, 2021, 2020, 2019, 2018, 2017 |
UT Tax/ UTGST Rate Notifications: 2023, 2022, 2021, 2020, 2019, 2018, 2017 |
Compensation Cess Notifications: 2023, 2022, 2021, 2020, 2019, 2018, 2017 |
Compensation Cess Rate Notifications: 2023, 2022, 2021, 2020, 2019, 2018, 2017 |
CBIC Orders (CGST/ IGST/ UTGST): 2023, 2022, 2021, 2020, 2019, 2018, 2017 |
CBIC Press Releases: 2020, 2019, 2018, 2017 |
Note: For Official/ updated copy, please visit the CBIC website. |
Intermediary transaction to be taxed under CGST/SGST as per section 13(8) or IGST as per Section 7(5) in the case of a party outside India?