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Inter state or Intra state

09 August 2017

suppose there is a buyer who has / gives gst no. of MP. Now the said buyer buys coal from the supplier located in MP and declares that after buying coal he will take the coal to the state of UP ( however he is not registered in UP under gst) directly from supplier's location.
Can the invoice / delivery order be issued as inter state in such case. pl advise in detail with applicable section/ reason.

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13 Replies

RAMESH D MODI (Proprietor) (4869 Points)
Replied 09 August 2017

yes as per my view.

1 Like

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RAMESH D MODI (Proprietor) (4869 Points)
Replied 09 August 2017

yes as per my view.

1 Like

Studentsca (CA Practice ) (3577 Points)
Replied 09 August 2017

It is an intra state supply in MP. Apply CGST & SGST.

Narendra Kumar (CA ) (51 Points)
Replied 09 August 2017

you mean to say that for being treating a transaction as inter state the buyer must give gst no. of UP then only we can charge igst.
but the law says that the place/destination where the movement of the goods terminates will determine the interstate or intra state

Kunal Pansari (Accountant) (1037 Points)
Replied 09 August 2017

The seller will issue the Intra State bill to the buyer, charging CGST & SGST. Then the buyer will further issue his own invoice for UP charging IGST and take the goods to UP

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Studentsca (CA Practice ) (3577 Points)
Replied 09 August 2017

Sorry my mistake.

It will be an interstate transaction as the goods involving movement by recipient is also covered under section 10 (1) (a) of the IGST Act.

Since the recipient is delivering goods to UP final delivery this transaction will also squarely fall under that section.

Studentsca (CA Practice ) (3577 Points)
Replied 09 August 2017

I was under the impression that only goods involving movement by supplier is covered under the above mentioned section.

Narendra Kumar (CA ) (51 Points)
Replied 09 August 2017

sir, this mean that where the gst no. of supplier of goods and receiver of goods are of same state the sale will be intra state and the place where the movement of the goods terminates in other state is immaterial.
for treating a transaction as inter state, following two conditions should be satisfied :
1 . gst no. of the supplier and receiver of goods should be of different state and
2. movement of the goods should terminate in other state (UP in this case)

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 09 August 2017

In this Case IGST can't applicable. It's applicable CGST & SGST. Also the buyer ll be treat as URD in UP....

Narendra Kumar (CA ) (51 Points)
Replied 09 August 2017

OK, thanks

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kamalarao pamula (135 Points)
Replied 09 August 2017

Tax is to be charged on the basis of receipient place and state. in this case supplier and the buyer/receipient are in the same state. you are not concerned about the goods once the ownership of the property transferred to him.