Chapter IV - Determination of nature of supply
Section 7
Section 7: Inter-State supply
Section 7 classifies supplies as inter-State by comparing supplier location and place of supply, with specific rules for imports, SEZ supplies and residual cases.
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Need advice on Section 7?
This article is for general information. Refer to the Integrated Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Key takeaways
Different State or Union territory
Goods and services supplied across two States, two Union territories, or a State and Union territory are inter-State, subject to the appropriate place-of-supply section.
Imports and overseas place
Goods before crossing Indian customs frontiers and services imported into India are treated as inter-State; a supply by an India-located supplier with place of supply outside India also falls within this section.
SEZ and residual supplies
Supplies to or by an SEZ developer or unit are inter-State. A taxable-territory supply that is not intra-State and is not otherwise covered is also included.
Different State or Union territory
Goods and services supplied across two States, two Union territories, or a State and Union territory are inter-State, subject to the appropriate place-of-supply section.
Imports and overseas place
Goods before crossing Indian customs frontiers and services imported into India are treated as inter-State; a supply by an India-located supplier with place of supply outside India also falls within this section.
SEZ and residual supplies
Supplies to or by an SEZ developer or unit are inter-State. A taxable-territory supply that is not intra-State and is not otherwise covered is also included.
Practical checklist
Do
- Establish the supplier location and place of supply under the correct provision.
- Check import/customs-frontier or SEZ facts separately.
- Document why Section 8 intra-State classification does not apply.
Frequently asked questions
Can a supply within one State still be inter-State?
Yes. Section 7(5)(b) treats a supply to or by an SEZ developer or unit as inter-State.
Need help applying this provision to your situation?
Contact BizeneedLast updated 9 October 2026