CGST vs SGST vs IGST Explained

India's GST is not a single tax collected by one authority — it is split between the central government and state governments, because India has a dual GST structure. CGST (Central GST), SGST (State GST), and IGST (Integrated GST) are the three components used to divide that tax depending on where a transaction happens.

CGST and SGST are charged together on sales that happen within a single state, while IGST is charged on its own for sales between two different states, or for imports and exports. This guide builds on the rate structure covered in our Understanding GST Slabs guide — if you haven't read that yet, it's a useful starting point before this one.

Whichever GST rate applies to a sale — for example, 18% under our 18% GST Calculator — that rate is collected in one of two ways, never both at once. For a sale within the same state, the rate is divided equally into CGST and SGST. For a sale between states, the full rate is collected as IGST instead.

This means the buyer never pays more or less depending on which method applies — an 18% GST item costs the same whether it's taxed as 9% CGST + 9% SGST or as a single 18% IGST. What changes is only which government (or governments) receive the money, and how it's itemized on the invoice.

CGST and SGST apply together on an intrastate transaction — one where both the supplier and the place of supply are in the same state. A shop in Karnataka selling to a customer in Karnataka, for instance, would charge CGST and SGST rather than IGST.

The two are almost always split equally. If the applicable GST rate on a product is 18%, that typically means 9% is collected as CGST and 9% as SGST, appearing as two separate line items on the invoice rather than a single combined figure.

IGST applies to an interstate transaction — one where the supplier's location and the place of supply fall in two different states or union territories. It also applies to imports into India and exports out of it, and to supplies made to or from a Special Economic Zone.

Rather than splitting the rate into two parts, the seller charges the full GST rate as a single IGST line on the invoice. The IGST collected by the central government is later apportioned to the destination state through a settlement mechanism between governments — a process the buyer and seller don't need to manage directly.

The single factor that decides whether a sale uses CGST + SGST or IGST is the place of supply compared to the supplier's location — not where the goods happen to be manufactured, or which state the company is registered in for other purposes.

If the supplier and the place of supply are in the same state, the transaction is intrastate, and CGST + SGST apply. If they fall in different states or union territories, the transaction is interstate, and IGST applies instead. A business that sells both within its home state and to customers elsewhere in India will typically use both methods across different invoices, depending on each buyer's location.

Input Tax Credit (ITC) lets a registered business reduce its GST liability by the amount of GST it already paid on its own purchases, so tax isn't charged repeatedly at every stage of a supply chain. Which specific credit can be used against which liability follows a set order, and CGST, SGST, and IGST credits aren't fully interchangeable.

As a general pattern, CGST credit can be used to offset CGST or IGST liability, SGST credit can be used to offset SGST or IGST liability, and IGST credit can be used to offset IGST, CGST, or SGST liability, in a specific priority order. CGST and SGST credit generally cannot be used to directly offset each other. This is a simplified overview for beginners — a business handling actual ITC claims should confirm current rules with a tax professional or the official GST portal.