GST State Codes and Their Role in Interstate Tax Transactions

If you have ever looked closely at a GSTIN, you may have noticed that it starts with two digits. Those two digits are called the GST State Code. While they may seem like small details, they play a major role in how GST is charged, reported, and distributed among states in India.

For businesses dealing with customers or suppliers across different states, understanding the state goods and services tax code is essential. A simple mistake in entering the wrong code can lead to incorrect tax payments, invoice mismatches or issues with input tax credit.

What is a GST State Code?

A GST state code is simply a two-digit number given to every state and Union Territory under the GST system. These codes are based on the 2011 Census state coding system and have been part of GST since day one. 

At present, there are 38 active GST state codes covering all states and Union Territories, along with two extra codes for specific GST commissionerates in Hyderabad and Kurnool. Code 97 is used for Other Territories, mainly offshore areas that do not fall under a specific state, while code 99 is reserved for imports.

These codes appear right at the beginning of the GSTIN, the 15-digit alphanumeric Goods and Services Tax Identification Number given to every registered taxpayer. Here’s what the full GSTIN structure looks like:

• The first two digits are the state code
• The next 10 digits are the PAN number
• The 13th digit is a one-digit registration sequence number
• The last two are default check digits

Key Codes Reference

Below are some frequently referenced GST state codes currently in use

Code	State / UT
01	Jammu and Kashmir
03	Punjab
07	Delhi
09	Uttar Pradesh
10	Bihar
19	West Bengal
24	Gujarat
27	Maharashtra
29	Karnataka
33	Tamil Nadu
34	Puducherry
36	Telangana
37	Andhra Pradesh
38	Ladakh

 

Note that code 25 for Daman and Diu was discontinued following the 2020 merger of that territory with Dadra and Nagar Haveli, which now uses code 26. Ladakh received its own code 38 in 2019 after being carved out as a separate union territory.

Intrastate vs Interstate

The most critical function of state codes is distinguishing intrastate transactions from interstate ones, a distinction that directly determines which tax heads apply.

When a supplier and buyer are registered in the same state, their GSTINs will share the same opening two digits. The transaction is classified as intrastate, and Central GST (CGST) and State GST (SGST) are levied in equal proportions on the transaction value. When the two-digit codes differ between supplier and buyer, the transaction crosses state lines. In this case, Integrated GST (IGST) is charged at the combined CGST and SGST rate that would otherwise apply.

This distinction is determined automatically through the Place of Supply rules in the GST law. The buyer’s GST state code, shown through the Place of Supply on the invoice, decides how tax gets charged. For example, if a seller in Maharashtra (27) sells to a buyer in Karnataka (29), IGST applies. But if that same seller sells to someone else registered in Maharashtra, CGST and SGST are charged instead. It all comes down to those first two digits.

E-Way Bills and Transit

State codes are just as important for E-Way Bills too, which are required when goods worth over ₹50,000 move from one state to another. The state code mentioned on the invoice must match the one on the E-Way Bill. If there’s a mismatch, the goods can be stopped in transit and may attract penalties from tax officials. That’s why businesses shipping across states need to make sure their accounting and billing software has the correct and updated list of state codes.

Conclusion

For businesses, the smartest move is to treat GST State Codes as a regular compliance checkpoint, not just a one-time setup detail. Review your customer and vendor master data often, train billing teams to verify GST details before raising invoices and run quick monthly checks across invoices, returns, and logistics documents. Spending a few minutes on verification can save hours of correction work later and help keep interstate operations smooth, accurate and hassle-free.

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