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GST worked examples: inter-State supplies and IGST

Worked examples of inter-State supplies: goods and services across States, branch transfers, property in two States, goods transport agencies, air tickets and post-paid mobile services.

Published 4 October 2026

An inter-State supply — supplier in one State, place of supply in another — bears a single tax, integrated tax (IGST), at the combined rate. The Centre later settles the State share with the destination State. These worked examples show how the place of supply decides the result. Figures are illustrations; rates are those in force on 04.10.2026.

B.1 — Goods sent to another State

Facts. A Mumbai manufacturer sells goods taxed at 18% for Rs. 8,00,000 to a retailer in Delhi; the goods are dispatched to Delhi.

  1. Place of supply: where the movement ends — Delhi (section 10(1)(a) IGST Act).
  2. Supplier in Maharashtra, place of supply in Delhi: inter-State (section 7(1)).
  3. IGST 18% = Rs. 1,44,000.
  4. The Delhi retailer takes IGST credit; when it resells within Delhi it charges CGST + Delhi SGST.

Result. One IGST charge. The State share goes to Delhi, the consuming State, through the settlement under section 17 IGST Act.

B.2 — Services to a registered client in another State

Facts. A Bengaluru IT consultancy bills a registered Mumbai client Rs. 12,00,000 (18%).

  1. Place of supply for a registered recipient: its location — Mumbai (section 12(2)(a)).
  2. Karnataka supplier, Maharashtra place of supply: inter-State. IGST 18% = Rs. 2,16,000.
  3. The client uses the IGST credit first against IGST, then against CGST and SGST in any order (section 49A; Rule 88A).

Result. IGST follows the registered recipient's location.

B.3 — Goods sold to an unregistered buyer in another State

Facts. A Jaipur seller ships goods taxed at 18% worth Rs. 40,000 to an individual in Kolkata.

  1. Place of supply is where the movement ends — Kolkata — whether or not the buyer is registered.
  2. Inter-State: IGST 18% = Rs. 7,200. The invoice must show the buyer's State as the place of supply.
  3. A person making inter-State taxable supplies of goods must register regardless of turnover (section 24(i)).

Result. IGST, reported in GSTR-1 against the destination State.

B.4 — Stock transfer to a branch in another State

Facts. A company transfers goods worth Rs. 10,00,000 from its Mumbai registration to its Delhi registration.

  1. Separately registered establishments are distinct persons (section 25(4)); the transfer is a supply even without consideration (Schedule I, para 2).
  2. Inter-State: IGST at the goods rate.
  3. Value under Rule 28: the open market value, or the invoice value where the receiving branch is eligible for full credit.

Result. IGST payable, and creditable at the Delhi branch.

B.5 — Service on immovable property spread over two States

Facts. A Mumbai architect designs a campus straddling Delhi and Haryana for a fee of Rs. 5,00,000. Three-fifths of the land area is in Delhi.

  1. Place of supply of services directly in relation to immovable property is the location of the property (section 12(3)). Where it lies in more than one State, the supply is treated as made in each State in proportion to the value attributable to each (Explanation).
  2. Rule 4 of the IGST Rules apportions such services, other than accommodation, by the area of the property in each State: Delhi Rs. 3,00,000, Haryana Rs. 2,00,000.
  3. The supplier is in Maharashtra, so both parts are inter-State: IGST 18% on each, with separate place-of-supply reporting.

Result. Two inter-State supplies. Had the architect been in Delhi, the Delhi part would have been intra-State (CGST + SGST).

B.6 — Road transport by a goods transport agency

Facts. A Mumbai transport agency (GTA) carries a registered Mumbai shipper's goods to Bengaluru for Rs. 50,000.

  1. Place of supply of goods transport to a registered person is the recipient's location — Mumbai (section 12(8)), even though the goods go to Karnataka. Intra-State.
  2. Rate: 5% without input tax credit, or, if the GTA opts, 18% with credit under forward charge (rates from 22.09.2025).
  3. At 5%, where the recipient is a specified person such as a factory, company or registered person, tax is paid by the recipient under reverse charge unless the GTA has opted for forward charge.

Result. CGST + SGST, not IGST, despite the inter-State movement.

B.7 — Air ticket for an unregistered passenger

Facts. An airline sells a Delhi–Mumbai economy ticket for Rs. 6,000 to an unregistered individual.

  1. Place of supply of passenger transport to an unregistered person is where the passenger embarks — Delhi (section 12(9)).
  2. The airline bills from its Delhi registration: intra-State, CGST + SGST.
  3. Economy class is taxed at 5%; other classes at 18% (from 22.09.2025).

Result. Rs. 300 tax, CGST + Delhi SGST. For a registered passenger, the place of supply is the passenger's location instead.

B.8 — Post-paid mobile connection

Facts. A company in Delhi pays for a post-paid mobile connection used by an employee in Mumbai; the bill (Rs. 5,000 a month, 18%) is addressed to the Delhi office.

  1. For post-paid mobile services, the place of supply is the billing address of the recipient on the supplier's records (section 12(11)) — Delhi.
  2. Billed from the operator's Delhi registration: CGST + Delhi SGST.

Result. Where the employee uses the phone does not matter.

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