Section 8 of IGST Act 2017: Intra State Supply

Provisions under Section 8 of the Integrated Goods and Services Tax (IGST) Act, 2017 relating to “Intra-State Supply”, are as under:

Section 8 of IGST Act 2017: Intra 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 of goods are in the same State or same Union territory shall be treated as intra-State supply:

Provided that the following supply of goods shall not be treated as intra-State supply, namely:–

(i) supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit;

(ii) goods imported into the territory of India till they cross the customs frontiers of India; or

(iii) supplies made to a tourist referred to in section 15.

(2) 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:

Provided that 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.

Explanation 1: For the purposes of this Act, where a person has,–

(i) an establishment in India and any other establishment outside India;

(ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or

(iii) an establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory, [Refer Note 1]

then such establishments shall be treated as establishments of distinct persons.

Explanation 2: A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as having an establishment in that territory.

Amendments History:

1. The text ‘being a business vertical’ omitted from clause (iii) of Explanation 1 vide the IGST (Amendment) Act, 2018 (GOI Notification dt. 30/08/2018), followed with CBIC Notification on commencement date of 01/02/2019 vide Integrated Tax Notification 1/2019 dated 29/01/2019.

Commentary on Section 8 of the IGST Act

Section 8 of the Integrated Goods and Services Tax (IGST) Act, 2017 discusses the concept of “Intra-State Supply” in the context of goods and services. The section outlines the conditions under which a supply is considered intra-state, along with specific exceptions.

Intra-State Supply of Goods: Section 8(1) of the IGST Act

A supply of goods is treated as intra-state when both the supplier’s location and the place of supply are in the same State or Union territory, subject to Section 10. However, there are three exceptions that are not treated as intra-state supply:

a) Goods supplied to or by a Special Economic Zone (SEZ) developer or SEZ unit.

b) Goods imported into India until they cross the customs frontiers of India.

c) Supplies made to a tourist as per Section 15.

Intra-State Supply of Services: Section 8(2) of the IGST Act

A supply of services is considered intra-state when the location of the supplier and the place of supply are in the same State or Union territory, subject to Section 12. The only exception is the supply of services to or by an SEZ developer or SEZ unit, which is not considered as intra-state supply.

Explanations to Section 8 of the IGST Act

The section also provides two explanations to clarify the application of the Act:

i) Establishments of distinct persons: This explanation clarifies that if a person has establishments in different locations, such as within India and outside India, within a State or Union territory and outside that State or Union territory, or within a State or Union territory and registered under that State or Union territory, these establishments are treated as establishments of distinct persons.

ii) Establishment in a territory: This explanation states that a person conducting business through a branch, agency or representational office in any territory is considered to have an establishment in that territory.

In summary, Section 8 of the IGST Act, 2017 defines the conditions for intra-state supply of goods and services and provides exceptions where such supplies are not considered as intra-state. It also clarifies the treatment of establishments under the Act.

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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.