What is the difference between CGST, SGST, and IGST?

CGST and SGST apply together on intrastate supplies: the Centre collects CGST and the State collects SGST, each usually half of the combined GST rate. IGST applies on interstate supplies and imports (along with customs duty on imported goods); it is collected by the Centre and later shared with states under a formula.

How do I know if my supply is intrastate or interstate?

Broadly, if the supplier’s location and the place of supply (where the goods or services are consumed) are in the same state or union territory, it is intrastate (CGST + SGST). If they are in different states/UTs, it is interstate (IGST). The exact determination follows GST law and place-of-supply rules; use your GSTIN, addresses, and transaction facts or consult a tax professional for edge cases.

Why is the total tax the same for 18% intrastate vs 18% interstate?

For a standard taxable supply, the headline rate (e.g. 18%) is the same economic burden: intrastate splits it into CGST 9% + SGST 9% on the taxable value; interstate charges IGST 18% on the same base. The split is about which statutes collect the tax, not about charging double tax.

Are exports charged GST?

Exports are generally treated as zero-rated supplies. You do not charge GST on the export invoice in the usual way; you may supply under a Letter of Undertaking (LUT) without paying IGST, or pay IGST and claim refund. Procedures and documentation matter—follow CBIC guidelines and your CA’s advice.

What taxes apply on imports?

Imported goods typically attract customs duty (as applicable) and IGST on imports. Imported services are also taxed under GST rules. Rates and exemptions change; verify current notifications for your HSN/SAC and country.

GST Basics

Understanding GST in India: CGST, SGST, IGST, Interstate & Intrastate Supply

India uses a dual GST model: both the Centre and States share tax on many domestic supplies. Whether you see CGST and SGST or a single IGST line on an invoice depends on where the supply is treated as occurring relative to the supplier—not on the headline GST percentage alone.

This article is for general education. Tax positions depend on facts, notifications, and place-of-supply rules; consult a qualified professional for your situation.

What is GST?

Goods and Services Tax (GST) is a multi-stage, destination-based indirect tax on the supply of goods and services. Destination-based means revenue generally aligns with the place of supply (consumption), not only where the seller is registered—subject to detailed legal rules.

The three components you see on invoices

CGST (Central GST)

Collected by the Central Government. It appears on intrastate supplies together with SGST.

SGST (State GST) / UTGST

Collected by the State (or UTGST in union territories without legislature). Also on intrastate supplies, paired with CGST.

IGST (Integrated GST)

Collected by the Central Government on interstate supplies and on imports (in addition to customs duty where applicable). It is a single levy at the full rate on the taxable value instead of splitting into CGST + SGST.

Intrastate vs interstate supply

Intrastate supply

When the supply is treated as taking place within the same state or UT (supplier and place of supply align under the rules).

Tax shown: CGST + SGST (or CGST + UTGST)

Example: combined GST rate 18% is often shown as CGST 9% + SGST 9% on the taxable value.

Interstate supply

When the supply is treated as across state/UT boundaries under GST law.

Tax shown: IGST at the full rate

Example: 18% IGST on the taxable value (not 9% + 9% separately).

Imports and exports

Imports of goods are generally taxed with customs duty (as applicable) plus IGST on imports. Imported services are brought into the GST net under specific rules; rates and exemptions should be verified for your case.

Exports are typically zero-rated: you do not charge domestic GST on the export in the normal way. Exporters often use a Letter of Undertaking (LUT) to ship without paying IGST, or pay IGST and claim refund, depending on procedure and eligibility.

How CGST, SGST, and IGST are calculated

Below, examples use a taxable value (amount on which GST is computed) after discounts on the tax-exclusive price. If your prices are tax-inclusive, you first back out the taxable value from the gross amount, then apply the same split.

Case 1: Intrastate (CGST + SGST)

Taxable value = Rs. 1,000
Total GST rate = 18%

Combined tax = 1,000 × 18% = Rs. 180

Split equally between Centre and State:

CGST = 1,000 × 9% = Rs. 90
SGST = 1,000 × 9% = Rs. 90

Invoice total (tax exclusive base) = Rs. 1,000 + Rs. 180 = Rs. 1,180

Case 2: Interstate (IGST)

Taxable value = Rs. 1,000
GST rate = 18%

IGST = 1,000 × 18% = Rs. 180

Invoice total = Rs. 1,000 + Rs. 180 = Rs. 1,180

The total tax rupees match the intrastate example; only the label and collection route change (IGST vs CGST+SGST).

Input Tax Credit (ITC) in brief

Businesses can usually offset GST paid on purchases (eligible ITC) against GST collected on sales, paying only the net amount in cash. Credit utilisation follows statutory order: for example, IGST liability is typically set off using IGST credit first, then CGST and SGST credits as per rules—CGST and SGST credits are not freely cross-applied against each other.

Quick comparison

Scenario	Tax on invoice	Typical collector
Intrastate	CGST + SGST (or UTGST)	Centre + State / UT
Interstate	IGST	Centre (settlement across states)
Import (goods)	Customs duty + IGST (as applicable)	Customs / GST mechanisms
Export	Zero-rated (no domestic GST charge)	LUT / refund mechanisms

Practical takeaway

If you remember one idea: the nature of the supply (intrastate vs interstate, import, export) determines whether you present CGST + SGST, IGST, or zero-rated treatment—not the fact that the product is simply “GST 18%.” Your invoice and ERP should reflect the correct split so buyers can claim ITC correctly.

Frequently asked questions

What is the difference between CGST, SGST, and IGST?: CGST and SGST apply together on intrastate supplies: the Centre collects CGST and the State collects SGST, each usually half of the combined GST rate. IGST applies on interstate supplies and imports (along with customs duty on imported goods); it is collected by the Centre and later shared with states under a formula.
How do I know if my supply is intrastate or interstate?: Broadly, if the supplier’s location and the place of supply (where the goods or services are consumed) are in the same state or union territory, it is intrastate (CGST + SGST). If they are in different states/UTs, it is interstate (IGST). The exact determination follows GST law and place-of-supply rules; use your GSTIN, addresses, and transaction facts or consult a tax professional for edge cases.
Why is the total tax the same for 18% intrastate vs 18% interstate?: For a standard taxable supply, the headline rate (e.g. 18%) is the same economic burden: intrastate splits it into CGST 9% + SGST 9% on the taxable value; interstate charges IGST 18% on the same base. The split is about which statutes collect the tax, not about charging double tax.
Are exports charged GST?: Exports are generally treated as zero-rated supplies. You do not charge GST on the export invoice in the usual way; you may supply under a Letter of Undertaking (LUT) without paying IGST, or pay IGST and claim refund. Procedures and documentation matter—follow CBIC guidelines and your CA’s advice.
What taxes apply on imports?: Imported goods typically attract customs duty (as applicable) and IGST on imports. Imported services are also taxed under GST rules. Rates and exemptions change; verify current notifications for your HSN/SAC and country.

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