Meaning of Supply of goods or services or both in the course of inter-State trade or commerce :
Section 7 of IGST Act make provisions in respect of Supply of goods or services or both in the course of inter-State trade or commerce (i.e. from one State to another).
Inter-state supply of goods – As per section 7(1) of IGST Act, supply of goods in the course of inter-State trade or commerce (i.e. from one State to another) means any supply where the location of the supplier and the place of supply are in two different States or two different Union Territories or a State and Union Territory. However, this is subject to the provisions of section 10 Act [i.e. provisions of section 10 override provisions of section 7].
Import of goods shall be deemed to be inter-state suppl y – 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 – section 7(2) of IGST Act.
Thus, IGST will be payable, at the time of import of goods from customs.
IGST will be payable on value determined under section 3 of Customs Tariff Act on value determined under said Act at the point where duties of customs are levied on the said goods under section 12 of Customs Act, 1962 – proviso to section 5(1) of IGST Act.
Inter-state supply of services – Supply of services in the course of inter-State trade or commerce means any supply where the location of the supplier and the place of supply are in different States or two different Union Territories or a State and Union Territory. However, this is subject to the provisions of section 12 of IGST Act – section 7(3) of IGST Act.
Import of services shall be treated to be inter-state supply –Supply of services imported into the territory of India shall be deemed to be a supply of services in the course of inter-State trade or commerce – section 7(4) of IGST Act.
Thus, IGST will be payable, mostly under reverse charge.
Export of goods or services shall be treated to be inter-state supply – Supply of goods or services or both, when the supplier is located in India and the place of supply is outside India, shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce – section 7(5)(a) of IGST Act.
Supply to and by SEZ developer or SEZ unit shall be treated to be inter-state supply – Supply of goods and/or services to or by a SEZ developer or an SEZ unit, shall be deemed to be a supply of goods or services or both in the course of inter-State trade or commerce – section 7(5)(b) of IGST Act.
Supply which is not intra-state supply is inter-state supply – Any supply of goods or services or both in the taxable territory, not being an intra-State supply and not covered elsewhere in this section, shall be deemed to be a supply of goods or services or both in the course of inter-State trade or commerce – section 7(5)(c) of IGST Act, 2017.
Thus, any supply which is not intra-state supply is ‘inter-state’ supply and will be subject to IGST.