What the state code tells you
Every GSTIN starts with the code of the state or union territory where that registration is held. A business with branches in three states has three GSTINs, each starting with a different code. The same codes appear in the “place of supply” field on invoices and in e-way bills.
How place of supply decides the tax
- Supplier’s state = place of supply: intra-state supply. Charge CGST + SGST (or CGST + UTGST in a union territory without its own legislature), each at half the rate.
- Supplier’s state ≠ place of supply: inter-state supply. Charge IGST at the full rate.
For goods that move, the place of supply is generally where the movement ends for delivery to the recipient. There are separate rules for services, bill-to-ship-to transactions, imports, exports and SEZ supplies, so check the IGST Act provisions for your situation.
Example (illustrative)
A Morbi tile trader (GSTIN starting 24, Gujarat) sells tiles to a builder in Pune whose GSTIN starts with 27 (Maharashtra), and the goods are delivered to Pune. Supplier state 24 and place of supply 27 differ, so the invoice carries IGST. The same sale to a buyer in Ahmedabad (also 24) would carry CGST + SGST.
Common mistakes
- Picking the place of supply from the buyer’s billing address when the goods are shipped to a different state.
- Charging CGST + SGST to an SEZ unit in the same state. Supplies to SEZ units are treated as inter-state.
- Mixing up similar-looking codes, such as 24 (Gujarat) and 27 (Maharashtra), when typing a GSTIN by hand.
Codes are taken from the list used across GST systems. Confirm on the GST portal if you find a code that is not listed here.