diff --git a/addons/l10n_in/models/account_invoice.py b/addons/l10n_in/models/account_invoice.py
index 4d312808418..d0fc2c60bce 100644
--- a/addons/l10n_in/models/account_invoice.py
+++ b/addons/l10n_in/models/account_invoice.py
@@ -37,10 +37,10 @@ class AccountMove(models.Model):
         for record in self:
             record.l10n_in_gst_treatment = record.partner_id.l10n_in_gst_treatment
 
-    @api.depends('partner_id')
+    @api.depends('partner_id', 'company_id')
     def _compute_l10n_in_state_id(self):
         for move in self:
-            if move.country_code == 'IN':
+            if move.country_code == 'IN' and move.journal_id.type == 'sale':
                 country_code = move.partner_id.country_id.code
                 if country_code == 'IN':
                     move.l10n_in_state_id = move.partner_id.state_id
@@ -48,6 +48,8 @@ class AccountMove(models.Model):
                     move.l10n_in_state_id = self.env.ref('l10n_in.state_in_oc', raise_if_not_found=False)
                 else:
                     move.l10n_in_state_id = move.company_id.state_id
+            elif move.country_code == 'IN' and move.journal_id.type == 'purchase':
+                move.l10n_in_state_id = move.company_id.state_id
             else:
                 move.l10n_in_state_id = False
 
diff --git a/addons/l10n_in/views/account_invoice_views.xml b/addons/l10n_in/views/account_invoice_views.xml
index d9aff6e1de8..45995d5044c 100644
--- a/addons/l10n_in/views/account_invoice_views.xml
+++ b/addons/l10n_in/views/account_invoice_views.xml
@@ -7,7 +7,7 @@
         <field name="arch" type="xml">
             <xpath expr="//field[@name='ref']" position="after">
                 <field name="country_code" invisible="1"/>
-                <field name="l10n_in_state_id"
+                <field name="l10n_in_state_id" domain="[('country_id.code', '=', 'IN')]"
                     attrs="{'invisible': ['|', ('country_code', '!=', 'IN'), ('move_type', '=', 'entry')], 'required': [('country_code', '=', 'IN'), ('move_type', '!=', 'entry')], 'readonly': [('state', '!=', 'draft')]}"/>
                 <field name="l10n_in_gst_treatment"
                     attrs="{'invisible': ['|', ('country_code', '!=', 'IN'), ('move_type', '=', 'entry')], 'required': [('country_code', '=', 'IN'), ('move_type', '!=', 'entry')], 'readonly': [('state', '!=', 'draft')]}"/>