Interstate supply and intrastate supply are terms used in the context of the Goods and Services Tax (GST) system in India.
Interstate supply refers to the movement of goods or services from one state to another state or Union Territory (UT). For example, if a supplier based in Delhi sells goods to a buyer in Mumbai, it will be considered as an interstate supply.
Intrastate supply, on the other hand, refers to the movement of goods or services within the same state or UT. For instance, if a supplier in Pune sells goods to a buyer in Mumbai, it will be considered as an intrastate supply because both Pune and Mumbai are located within the state of Maharashtra.
The GST rate applicable on interstate and intrastate supplies can vary, and businesses need to comply with different rules and regulations for each type of supply. For instance, interstate supplies are subject to Integrated GST (IGST), while intrastate supplies are subject to both Central GST (CGST) and State GST (SGST) or UT GST (UTGST), depending on the location of the supplier and the buyer.