CGST vs SGST vs IGST: The Clearest Explanation in India (With Calculator)
When you raise a GST invoice in India, one critical question determines how the tax splits: are the buyer and seller in the same state, or different states? This single answer determines whether you charge CGST plus SGST or a single IGST.
- CGST + SGST apply on intra-state transactions; IGST applies on inter-state transactions, imports, and exports.
- CGST and SGST are always equal halves of the total GST rate — an 18% sale splits into 9% CGST + 9% SGST.
- IGST is charged at the full GST rate with no splitting, and is collected entirely by the central government.
- The place of supply — not the billing address — determines whether a transaction is intra-state or inter-state.
- UTGST replaces SGST only in union territories without their own legislature, such as Chandigarh and Ladakh.
- IGST credit can offset IGST, CGST, or SGST liability, giving businesses with inter-state purchases more ITC flexibility.
This distinction confuses new GST registrants more than any other aspect of the tax. This guide explains each component clearly, with examples, so you never misclassify a transaction again.
CGST vs SGST vs IGST: Which Tax Applies to Your Transaction?
CGST is the Central Goods and Services Tax — the portion of GST collected by the central government on transactions that happen within a single state. When a seller in Mumbai sells to a buyer also in Mumbai, CGST applies. The CGST rate is always exactly half of the total GST rate on the transaction.
CGST Rate = Total GST Rate ÷ 2 CGST Amount = Taxable Value × (CGST Rate ÷ 100) Example: ₹10,000 sale at 18% GST (intra-state) CGST = 10,000 × 9% = ₹900
What Is SGST — State Goods and Services Tax?
SGST is the State Goods and Services Tax — collected by the state government on the same intra-state transactions. SGST always equals CGST exactly — both are half of the total GST rate. A single 18% GST transaction within one state generates ₹900 CGST and ₹900 SGST.
SGST revenue stays entirely with the state where the transaction occurs. The SGST framework ensures that states benefit from consumption tax revenue generated within their borders.
What Is IGST — Integrated Goods and Services Tax?
IGST is the Integrated Goods and Services Tax — applied when goods or services move across state lines. IGST applies to inter-state supplies, imports, and exports. IGST is collected entirely by the central government, which subsequently distributes the state's share to the destination state.
IGST Rate = Full GST Rate (no splitting) IGST Amount = Taxable Value × (IGST Rate ÷ 100) Example: ₹10,000 sale from Delhi to Chennai at 18% GST IGST = 10,000 × 18% = ₹1,800 (no CGST/SGST split)
CGST + SGST vs IGST — Side-by-Side Comparison
Both approaches collect the same total GST amount from the buyer. From the buyer's perspective, the total invoice amount is identical whether CGST+SGST or IGST applies. However, the distinction matters for the seller's filing and ITC reconciliation.
What Is Place of Supply — and Why It Determines CGST vs IGST
The place of supply is the GST concept that determines which type of tax applies. If the place of supply is the same state as the supplier's registered state, CGST and SGST apply. If the place of supply is a different state, IGST applies.
For goods, the place of supply is generally straightforward — it is where the goods are delivered. For services, the rules are more nuanced. The GST Act contains over 14 specific rules for determining the place of supply of services.
Common place-of-supply scenarios for services
A Mumbai agency bills a Mumbai company: Place of supply = Maharashtra = same as supplier's state → CGST + SGST
A Mumbai agency bills a Bengaluru company: Place of supply = Karnataka ≠ Maharashtra → IGST
A Delhi consultant delivers an online course nationally: Place of supply = each student's location → mostly IGST for out-of-Delhi students
What Is UTGST — and When Does It Apply?
UTGST is the Union Territory Goods and Services Tax. It applies instead of SGST in union territories that do not have their own legislature — namely Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep, and Ladakh. Delhi and Puducherry have legislatures, so they levy SGST rather than UTGST.
ITC Implications — Why the CGST/IGST Split Matters for Businesses
Input Tax Credit (ITC) rules have specific provisions about how CGST, SGST, and IGST credits are used. IGST credit can be used to offset IGST, CGST, or SGST liability — in that order. CGST credit can only offset CGST and IGST, while SGST credit can only offset SGST and IGST.
A business with significant IGST credit has more flexibility in offsetting various tax liabilities than one with only CGST credit. This means inter-state purchasing can sometimes provide ITC flexibility advantages.
For a complete guide to calculating CGST and IGST amounts at each rate, see our article on how to calculate GST in India. For a full breakdown of which rate applies to your product, read our guide on GST rate slabs in India.
GST Portal — place of supply and tax type rules
CGST, SGST, and IGST — Frequently Asked Questions
What is the main difference between CGST, SGST, and IGST?
CGST and SGST together apply on intra-state sales and are collected by the central and state governments respectively, while IGST applies as a single tax on inter-state sales and is collected by the central government.
Are CGST and SGST always equal?
Yes. CGST and SGST are always exactly half of the total GST rate each — an 18% transaction splits into 9% CGST and 9% SGST.
What determines whether CGST/SGST or IGST applies?
The place of supply determines this. If the place of supply is in the same state as the supplier, CGST and SGST apply; if it is in a different state, IGST applies instead.
When does UTGST apply instead of SGST?
UTGST applies in union territories without their own legislature — Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep, and Ladakh. Delhi and Puducherry have legislatures, so SGST applies there instead.
How do I calculate CGST and SGST on an amount?
Halve the GST rate and apply each half to the taxable value. On ₹10,000 at 18% GST: CGST = 10,000 × 9% = ₹900 and SGST = 10,000 × 9% = ₹900, for ₹1,800 total tax. A GST calculator does this split automatically for any slab.
What is the difference between CGST and IGST?
CGST applies only on intra-state sales (always paired with SGST, each at half the rate) and goes to the central government. IGST applies on inter-state sales as one single tax at the full rate, collected by the centre and later shared with the destination state.
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