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For an interstate sale, first establish the legally applicable place of supply. If it differs from the supplier’s state, report the outward supply in GSTR-1 with the transaction classified as interstate and the tax shown under Integrated Tax (IGST). File GSTR-1 by the applicable monthly or quarterly deadline, then file GSTR-3B for the period to declare and discharge the liability. The exact place-of-supply rule, tax rate and deadline can depend on the transaction and later government notifications, so verify those items before submitting.
Which GST returns record an interstate sale?
A normal or casual registered taxpayer generally uses two returns for the same period:
| Return | What it does | How interstate sales appear |
|---|---|---|
| GSTR-1 | Statement of outward supplies. It carries invoice and summary information for sales, exports, credit and debit notes, amendments, and nil, exempt or non-GST supplies. | Report the invoice or summary in the correct B2B or B2C section, identify the place of supply, and use the Integrated Tax field where the transaction is interstate. |
| GSTR-3B | Summary return used to declare the period’s taxable supplies and pay or otherwise discharge the resulting GST liability. | Include the interstate taxable value and IGST in the appropriate summary figures for the period. The detailed invoice-level record remains in GSTR-1. |
The GST Portal’s GSTR-1 FAQ describes GSTR-1 as the monthly or quarterly outward-supplies statement. It also states that a same-period GSTR-3B cannot be filed until that period’s GSTR-1 has been filed. Filing GSTR-1 therefore comes first in the normal sequence, even though both returns concern the same sales.
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Step 1: Establish whether the supply is interstate
The key test is the legally determined place of supply, not simply the address printed on an order. The GST Portal manual states: “In case of Inter-State transaction: In case the POS (place of supply) of the goods/ services is the different from the state of the supplier, the transaction is an Inter-State transaction.” Its GSTR-1 creation manual then presents an Integrated Tax field for that transaction.
Apply the place-of-supply provision that matches the transaction. Goods and services can have different rules, and special circumstances such as movement, installation, imports, exports, or location-specific services can change the result. A customer’s billing state is useful evidence but is not a substitute for the applicable statutory rule. Record the reasoning and supporting documents when the delivery location, recipient location and billing address do not align.
Information to determine before data entry
- Supplier’s state and GST registration used for the invoice.
- Whether the recipient is registered, and the recipient’s valid GSTIN when applicable.
- Nature of supply: goods or services, including any facts that trigger a special place-of-supply rule.
- Legally applicable place-of-supply state and the corresponding state code.
- Invoice date, serial number, taxable value, applicable rate and IGST amount.
- Whether the transaction is an export, exempt, nil-rated or non-GST supply rather than an ordinary taxable interstate sale.
Tax rates and exceptional treatments are transaction-specific. The filing interface can accept a rate and calculate or validate amounts, but it does not establish that the selected rate is legally correct.
Step 2: Identify the GSTR-1 reporting category
Use the recipient status and invoice facts to choose the table. Registered-business sales are generally reported invoice by invoice. Consumer sales are split between the B2C-large interstate category and the applicable other B2C summary category.
| Transaction | Typical GSTR-1 treatment | Details to keep ready |
|---|---|---|
| Interstate sale to a registered person (B2B) | Invoice-level B2B details. | Recipient GSTIN, invoice number and date, taxable value, rate, IGST and place of supply. |
| Qualifying taxable interstate sale to an unregistered consumer above the current B2C-large limit | Table 5, the B2C-large interstate invoice table. | Invoice-level information, state of place of supply, taxable value, rate and IGST. |
| Other unregistered consumer supplies | Relevant B2C summary category rather than the B2C-large table. | Place-of-supply state, rate-wise taxable value and tax totals, with invoice records retained. |
| Exports, credit/debit notes, amendments, nil, exempt or non-GST supplies | The specific GSTR-1 section listed for that document or supply type. | Export or note references and the original-document linkage where relevant. |
The B2C-large threshold changed in August 2024
For the August 2024 return period onward, the GST Portal manual says qualifying taxable interstate consumer invoices above ₹1 lakh belong in Table 5. For return periods through July 2024, it describes the earlier threshold as above ₹2.5 lakh. Apply the threshold belonging to the return period, not the date on which you happen to upload the return. The transition is documented in the portal’s GSTR-1 creation manual.
“Above” means an invoice must exceed the stated limit; do not move every consumer invoice into Table 5 merely because it is interstate. Confirm that the supply is taxable and that the place of supply is outside the supplier’s state before applying this category.
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Step 3: Choose the filing period and deadline
Determine whether the registration files monthly or under the Quarterly Return filing option (QRMP). The GST Portal gives these standard GSTR-1 dates:
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|---|---|---|
| Monthly | 11th of the succeeding month | For a January return, the standard date is 11 February. |
| Quarterly | 13th after the quarter ends | For an April–June quarter, the standard date is 13 July. |
These are standard dates, not an assurance that a particular period has not been extended. Government notifications can change a due date for a class of taxpayers, a state or a specific period. Check the live Returns dashboard and the relevant notification before filing. The dates and filing categories are summarized in the official GSTR-1 FAQ.
A nil GSTR-1 is still required when there is no business activity for the period. “No interstate sale” does not by itself remove the obligation if the registration has a GSTR-1 filing requirement.
Step 4: Prepare the records before opening GSTR-1
- Freeze the period. Reconcile the sales register to the return month or quarter and separate documents dated in another period.
- Map each invoice to a recipient type. Validate the GSTIN for B2B customers and identify unregistered consumers.
- Determine place of supply. Apply the rule for the actual goods or services and document exceptions instead of assuming that every out-of-state order is interstate.
- Calculate the taxable value and IGST. Use the legally applicable rate and retain the calculation. Do not copy a rate from a previous invoice without checking whether the product, service or exemption changed.
- Check document sequencing. Ensure invoice numbers, dates, credit notes and debit notes agree with the sales register and accounting records.
- Separate special categories. Mark exports, nil-rated, exempt and non-GST supplies, as well as amendments to an earlier return, so they do not enter an ordinary taxable table.
- Keep source evidence. Retain invoices, delivery or service records, customer status evidence and place-of-supply support for the period prescribed under GST law.
Step 5: Enter interstate invoices in the GST Portal
Sign in to the GST Portal, open the Returns dashboard for the registration, select the relevant period and choose GSTR-1. The exact screen can change, but the workflow follows the categories in the portal manual.
- Open the appropriate tile. Choose the B2B, B2C-large, other B2C, export, note or amendment section that matches the document.
- Enter the recipient and document details. For B2B invoices, provide the recipient GSTIN, invoice number and date. The portal may use a GSTIN to populate recipient and place-of-supply information.
- Verify the populated place of supply. The POS field remains editable. Correct it when the legally determined state differs from the value suggested by the GSTIN or another default.
- Mark the supply as interstate and complete the IGST fields. Enter the taxable value and rate, then check the calculated or entered IGST against the invoice and ledger.
- Apply the B2C-large rule where relevant. For a qualifying taxable interstate consumer invoice above the current period’s threshold, enter invoice-level data in Table 5. Put other unregistered consumer supplies in their applicable summary category.
- Save and review each record. Resolve validation messages before moving to the next section. A saved draft is not a filed return.
- Generate the summary and preview. Compare invoice counts, taxable values, POS states and IGST totals with the sales register. Inspect credit and debit notes and amendments separately.
- Submit and file. Submit the return, then complete filing with the authorized signatory’s verification method available for the registration. Record the acknowledgement or filing reference.
The portal’s outward-supplies manual explains the interstate field and the B2C-large table. Treat any auto-population as a convenience to check, not as proof that the underlying transaction data is correct.
Step 6: File GSTR-3B after GSTR-1
After GSTR-1 is filed for the period, open GSTR-3B for the same period. Transfer the period’s outward taxable values and IGST into the applicable summary fields, account for eligible adjustments under the law, and pay or discharge the resulting liability using the registration’s available balance and permitted payment process.
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The portal blocks same-period GSTR-3B until GSTR-1 has been filed, and other restrictions can apply when earlier returns remain pending. If the GSTR-3B tile is unavailable, first check that GSTR-1 has a filed status and that no earlier return or portal restriction is preventing access. Do not treat a successful GSTR-1 submission as payment of tax; the liability still has to be reported and discharged in GSTR-3B.
QRMP filers: when the Invoice Furnishing Facility helps
Eligible QRMP taxpayers may use the optional Invoice Furnishing Facility (IFF) for B2B documents in the first two months of a quarter. The IFF FAQ gives the 13th of the following month as the standard deadline. IFF is not a separate mandatory return and is not a route for every B2C document.
Use IFF when an early B2B upload will help the recipient see the document sooner. Documents furnished through IFF do not need to be entered again in the quarterly GSTR-1. Maintain a clear list of what was uploaded through IFF so that the quarterly filing contains only the remaining documents and the correct quarter summary.
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The GST Portal identifies three preparation routes. The choice affects data handling and review, not the legal classification of a sale.
| Method | Best suited to | Controls to apply |
|---|---|---|
| Online GST Portal entry | Small volumes or cases requiring direct review. | Use the draft, save, preview and validation steps; maintain a separate sales-register reconciliation. |
| Returns Offline Tool upload | Larger invoice sets prepared in a structured file. | Use the current tool and templates, validate the generated file, and review rejection messages before uploading again. |
| ASP through a GSP | Businesses integrating accounting or billing data with return preparation. | Confirm the provider’s current GST integration, access controls, data retention and successful portal submission. The portal’s reference to this route does not approve a particular vendor. |
These methods are listed in the GSTR-1 FAQ. A file generated by software is still the taxpayer’s responsibility: compare its output with the books before filing.
What the recipient sees: GSTR-2B and input-tax credit
Supplier-filed documents can flow into the recipient’s GSTR-2B. The GSTR-2B FAQ explains the source-document relationship and cautions that reflection is not a blanket guarantee of input-tax-credit eligibility.
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The recipient must independently assess whether the credit is allowable, whether the supply was received, whether the document and tax are correct, and whether any reversal is required under applicable provisions. As a supplier, make the GSTIN, invoice number, date, taxable value, POS and IGST agree with the document so that the recipient is not forced to resolve avoidable mismatches.
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Common interstate-filing errors and practical fixes
Using the customer’s billing state as the only POS test
Why it fails: Place of supply depends on the nature and circumstances of the goods or service. Fix: Apply the relevant rule, retain the supporting facts and correct the POS field before filing.
Putting every consumer invoice in Table 5
Why it fails: Table 5 is for qualifying taxable interstate B2C-large invoices above the threshold applicable to that return period. Fix: Separate qualifying invoices from other unregistered consumer supplies and use the correct summary category for the latter.
Applying the old ₹2.5 lakh limit to a current return
Why it fails: The threshold changed for the August 2024 return period. Fix: Use the period-specific rule shown in the portal manual and retain a record of the period classification.
Filing GSTR-3B first
Why it fails: Same-period GSTR-3B filing is blocked until GSTR-1 is filed. Fix: Complete and file GSTR-1, confirm its status, then open GSTR-3B.
Trusting auto-populated details without checking
Why it fails: A GSTIN-based suggestion can be wrong for the actual supply, and the POS field can be edited. Fix: Compare every populated field with the invoice and place-of-supply analysis.
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Assuming a filing date is permanent
Why it fails: Notifications can extend or alter a standard date. Fix: Check the period-specific portal notice before submitting, even when the standard 11th or 13th date is familiar.
Ignoring IGST validation messages
Why it fails: Invoice systems and the e-invoice environment can reject inconsistent interstate tax data. Fix: Compare POS, supplier state, tax type and tax amount, then consult the GST e-Invoice IRP’s troubleshooting guide for the specific validation message.
Worked classification examples
Registered customer in another state
A supplier registered in Maharashtra sells taxable goods to a customer whose legally determined place of supply is Karnataka. Because the POS differs from the supplier state, the invoice is interstate. Enter it in the B2B invoice-level section with the customer’s GSTIN, Karnataka as POS and IGST. Include the corresponding totals in GSTR-3B after filing GSTR-1.
Unregistered consumer, high-value interstate invoice
A supplier issues a taxable interstate consumer invoice in a return period governed by the current Table 5 rule, and the invoice exceeds ₹1 lakh. It belongs in the B2C-large invoice table, with the POS state, taxable value, rate and IGST. This classification is based on the return period and invoice facts, not merely on the consumer’s address label.
Unregistered consumer below the B2C-large limit
An otherwise taxable interstate consumer invoice that does not exceed the applicable Table 5 limit is reported in the relevant other-B2C summary category. Keep the invoice-level record in the books even when the return table is summarized.
Quick Recap
Final pre-filing checklist
- Correct return period and monthly or QRMP status selected.
- Current deadline checked against the live portal and notifications.
- Every supply tested under the correct place-of-supply rule.
- Interstate transactions separated from intrastate transactions.
- Recipient GSTINs validated for B2B invoices.
- B2C-large invoices tested against the threshold applicable to that period.
- Invoice numbers, dates, taxable values, rates, POS states and IGST totals reconciled to the books.
- Exports, notes, amendments, nil, exempt and non-GST supplies placed in their own sections.
- GSTR-1 preview agrees with the sales register and is filed successfully.
- GSTR-3B filed afterward and the period’s liability discharged.
- Recipient-facing mismatches investigated through records and GSTR-2B review where relevant.
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