CGST, SGST & IGST Explained (With Examples)

The difference between CGST, SGST and IGST comes down to one thing: where your buyer is. Sell within your own state and you charge CGST + SGST (split between the Centre and the state). Sell to another state and you charge a single IGST. The total tax is exactly the same either way — only the split changes. This guide shows you when each applies, with a worked example you can copy.

What is the difference between CGST, SGST and IGST?

All three are parts of the same Goods and Services Tax. They simply route the tax to different governments.

• CGST — Central GST: the Centre's share on a sale within a state.
• SGST — State GST: the state's share on a sale within the same state.
• IGST — Integrated GST: a single combined tax on a sale between two different states. The Centre collects it and passes the state's share to the destination state.

The rule is simple and stable: intra-state sale means CGST + SGST; inter-state sale means IGST. If a product is taxed at 18%, an intra-state sale is 9% CGST + 9% SGST, and an inter-state sale is 18% IGST. The buyer pays 18% either way. For the full picture of how GST works, see our pillar guide, GST for small businesses in India.

When is it intra-state (CGST + SGST)?

A sale is intra-state when the supplier and the place of supply are in the same state. This is the most common case for local shops and service providers.

Example: a stationery shop in Pune sells to a customer in Nagpur. Both are in Maharashtra, so it is an intra-state supply. The shop charges CGST + SGST, splitting the GST equally between the Centre and Maharashtra.

On the invoice, you show CGST and SGST as two separate lines, each at half the total rate. So 12% GST appears as 6% CGST and 6% SGST.

When is it inter-state (IGST)?

A sale is inter-state when the supplier and the place of supply are in different states (or union territories). It also applies to imports and exports.

Example: a textile wholesaler in Surat (Gujarat) sells to a retailer in Mumbai (Maharashtra). The supplier and buyer are in different states, so it is an inter-state supply. The wholesaler charges a single IGST at the full rate — no CGST or SGST.

For goods, the place of supply is usually where the goods are delivered. For services, the rules vary, so confirm the place-of-supply rule for your specific service if you are unsure.

Worked example: a Maharashtra seller to a Gujarat buyer

Let us put real numbers on it. Suppose Sharma Traders in Mumbai (Maharashtra) sells machine parts to Patel Industries in Ahmedabad (Gujarat). The taxable value is ₹1,00,000 and the GST rate is 18%.

Because the buyer is in a different state, this is inter-state — so IGST applies.

• Taxable value: ₹1,00,000
• IGST at 18%: ₹18,000
• Invoice total: ₹1,18,000

Now compare: if Sharma Traders had instead sold the same parts to a buyer in Pune (also Maharashtra), it would be intra-state — CGST + SGST.

• Taxable value: ₹1,00,000
• CGST at 9%: ₹9,000
• SGST at 9%: ₹9,000
• Invoice total: ₹1,18,000

Same ₹18,000 tax, same ₹1,18,000 total — only the split differs. Getting the split wrong does not change what the buyer pays, but it does cause mismatches in your returns. If you would rather not do this by hand, work out the split instantly with our free GST calculator.

How does the tax split appear on your invoice?

The invoice must show the tax components clearly and separately. This is what lets your buyer claim input tax credit and what the GST system reconciles against.

For an intra-state sale, your invoice shows:

• Taxable value of each item.
• CGST amount and rate on its own line.
• SGST amount and rate on its own line.

For an inter-state sale, your invoice shows a single IGST line at the full rate instead. Never mix the two on the same supply. For the complete list of mandatory fields and layout, see our GST invoice format guide.

What happens if you charge the wrong tax type?

This is one of the most common GST errors. Charging CGST + SGST on an inter-state sale, or IGST on a local one, creates a mismatch between your records and the buyer's.

The consequences are real: your buyer may struggle to claim their credit, and you may have to issue a corrected document and adjust your return. The fix is to determine the place of supply first, then pick the tax type — every single time.

Rates and place-of-supply rules for specific items can have nuances, so when a transaction is unusual, confirm on gst.gov.in or with your CA.

Getting the split right, automatically

CGST, SGST and IGST are not complicated once you remember the one rule — same state means CGST + SGST, different states means IGST. The hard part is applying it correctly on every invoice while you are busy running the business.

Invodo reads the buyer's state and applies the correct tax split for you, so a local sale and an inter-state sale are both right the first time. Need a quick number before then? Use the free GST calculator to see the split in seconds.