Interstate trade or commerce means

Posted on 20 April 2023 Category : GST terms

What is Interstate trade or commerce under GST

The details about Interstate trade or commerce are explained here.

Interstate trade or commerce

Services in the course of Inter State Trade or Commerce

Location of the supplier and recipient should be in different states
Import of goods and services in to India shall be treated as interstate trade or commerce.
Supply of Goods or Services from India to place outside India shall be treated as Inter State trade or commerce.
Supply of goods or services to SEZ developer or SEZ unit shall be treated as Inter State trade or commerce.
Any supply of goods or services which is not an Intra State supply shall be treated as Inter State Trade or Commerce.

.Interstate trade and commerce:

From the very beginning of its deliberations the Constituent Assembly was keen to ensure the freedom of inter-State trade and commerce throughout the Union. In fact, one of the primary purposes of federal Union itself is the establishment of freedom of commerce.

According to some writers, it is the Commerce clause of the American Constitution which made the United States one united nation. For, under the Commerce clause, the national government of the United States assumed enormous powers of regulating a wide variety of activities of the citizens and of the constituent States.

But the process has involved an unending legal conflict which is still raging between the Union and the State even after two centuries of the working of the Constitution. In Australia too, the situation is not happy owing to the omnibus character of the right to inter-State trade and commerce that is embodied in the Constitution.

Inter-State Goods and Service Tax (IGST)

IGST would be levied on all supplies of goods and /or services in the course of inter-state trade or commerce. IGST would be applicable to import of goods or services from outside country as well, which is indicated in the Constitutional Amendment Act, 2016.

The balance of credit under VAT as well as Cenvat Credit can be carried forward from the earlier regime. Further the duty and tax paid on closing stock would be available as credit where duty paying documents available, for hitherto exempted products / services which may not have been claimed as set-off. Lower deemed credit is available for those who do not have duty paying documents.

The information on Interstate trade or commerce is detailed above. Comment below your thoughts on Interstate trade or commerce.

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