Inter-state sale: an IGST invoice
When the goods go to another state, the sale is inter-state and carries one tax, IGST, at the full rate. This lesson shows when that applies and what happens if the wrong tax is charged.
When a supply is inter-state
A supply is inter-state when the supplier's location and the place of supply are in different states [IGST Act 2017, section 7]. For goods that move, the place of supply is where the movement ends [IGST Act 2017, section 10(1)(a)].
Worked example
The same 10 fans at Rs 2,000 each, sent to a buyer in another state, GST 18%:
- Taxable value: Rs 20,000
- IGST 18%: Rs 3,600
- Invoice total: Rs 23,600
The total is the same as in lesson 4; only the split of the tax changes.
If the wrong tax is charged
If CGST + SGST is charged on what was really an inter-state supply (or the other way round), the correct tax has to be paid, and the tax paid under the wrong head can be claimed back as a refund [CGST Act 2017, section 77; IGST Act 2017, section 19]. Getting the buyer's state right on the invoice avoids this.
Practice task
Questions
Is IGST more expensive for the buyer?
No. IGST is charged at the full rate, which equals CGST + SGST together, so the total is the same. A registered buyer claims it as credit in the same way.
Reviewed: 7 Nov 2026. This is general information, not advice from a chartered accountant. Rates and rules change; check the source named in brackets.