Basics
CGST, SGST and IGST: The Three GSTs, Explained
One GST rate, but split into different components depending on whether a sale is within the state or across states. This guide makes CGST, SGST and IGST simple.
Why there are three
GST is a single tax, but India is a union of states, so the tax has to be shared between the Centre and the states. That’s why a GST rate is split into components: CGST (Central), SGST (State) for sales within a state, and IGST (Integrated) for sales across states. The total rate is the same — the split just decides who gets what.
Intra-state sale: CGST + SGST
When the supplier and the place of supply are in the same state — say a Vadodara shop selling to a Vadodara customer — the GST is split equally into CGST and SGST. An 18% rate becomes 9% CGST + 9% SGST. Both appear as separate lines on the invoice.
Inter-state sale: IGST
When the supplier and the place of supply are in different states — a Gujarat seller supplying Maharashtra — a single IGST is charged instead, at the full rate (18% IGST, not split). IGST also applies to imports. The place-of-supply rules decide whether a transaction is intra-state or inter-state, which is why getting place of supply right matters.
Why the split matters to you
- Your invoice must show the correct component(s) — CGST+SGST or IGST
- Input tax credit has ordering rules for how IGST, CGST and SGST credits are used
- Charging CGST+SGST on an inter-state sale (or vice versa) is a common, correctable error
- Getting it wrong can disturb your buyer’s credit and your own returns
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