GST State Code & Jurisdiction Explained

16^th Jan 2026...

Published By : Team 811

The Goods and Services Tax (GST) introduced a unified system of taxation in India. It streamlined procedures and made financial transactions more transparent. Within this framework, the GST state code plays a crucial role. It helps in tax registration, determination of the correct jurisdiction, and regulatory compliance. For businesses and taxpayers, understanding both the state code and the corresponding GST jurisdiction is essential for managing GST requirements effectively.

What is the GST State Code?

Each Indian state and union territory is assigned a two-digit number known as the GST state code. This code forms the starting point of the Goods and Services Tax Identification Number (GSTIN), which is issued once a taxpayer is registered under GST. The first two digits of the GSTIN indicate the state or union territory where the business is registered.

For example:

A GSTIN beginning with 27 represents Maharashtra.
A GSTIN beginning with 09 represents Uttar Pradesh.

This coding system provides a uniform way to identify the location of taxpayers and link them with the correct GST jurisdiction.

Importance of GST State Codes

The GST state code serves several essential functions in the GST system:

Accurate Registration

During registration, a business must provide its state code along with other details. This enables tax authorities to identify the correct location of registration and assign the appropriate jurisdiction.

Tax Classification

The GST state code determines whether a transaction is taxed under CGST and SGST or UTGST. If the supplier and recipient are in the same state, CGST and SGST apply. When they are in different states, IGST is charged.

Simplified Compliance

State codes help standardise the structure for registration, return filing, and tax payment. This system increases transparency and accountability for both businesses and taxpayers.

Jurisdictional Role

The state code also establishes the GST jurisdiction, making it clear which authority will supervise the GST activities of specific taxpayers. This ensures better communication between officials and businesses.

GST Jurisdiction Explained

Understanding GST jurisdiction is important for businesses, as it determines whether the state authority or the central authority will oversee their GST matters. The allocation is usually based on turnover limits set under the law. All aspects of tax administration, including compliance checks, audits, and dispute resolution, depend on the correct jurisdiction being assigned.

For taxpayers, this link between the GST state code and the appropriate GST jurisdiction ensures that obligations are managed by the right authority, reducing confusion and promoting accountability.

Classification of Jurisdictions

The GST framework divides authority between State Jurisdiction and Central Jurisdiction.

State Jurisdiction

State authorities are responsible for administering taxes within their respective states or union territories. Their duties include the assessment and collection of State GST (SGST) or Union Territory GST (UTGST). Each state is divided into smaller areas, with a Jurisdictional Officer overseeing compliance and enforcement within their assigned region.

Central Jurisdiction

The central authorities manage the collection of Central GST (CGST) and Integrated GST (IGST). They supervise financial transactions that take place between states and union territories. Under this system, revenue is shared with the relevant states to ensure fair distribution of taxes collected from interstate trade.

Why Knowing Your Jurisdiction Matters

Local knowledge of GST jurisdiction is important for several reasons:

Identifying the correct authority ensures compliance and guarantees that taxes are paid to the proper body.
Disputes or assessments can be resolved more efficiently when businesses know which authority supervises their area.
Accurate jurisdictional details are necessary for filing returns, helping to avoid penalties and errors in tax calculations.
Under legal requirements, all GST-related documents need correct jurisdiction information on them such as invoices and returns.

Conclusion

A clear understanding of GST state codes and their related jurisdictions supports smooth tax operations across India. State codes not only enable registration and compliance but also determine where tax liabilities fall based on location. For businesses, identifying the correct jurisdiction is essential for meeting compliance standards and avoiding disputes.

Those seeking effective tax management should consult professionals for guidance on their specific jurisdiction. Businesses that pay attention to both local regulations and the role of state codes are better placed to build a reliable taxation framework for long-term growth.

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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.