CGST vs SGST vs IGST — The 2026 Guide for Indian Businesses
Every Indian freelancer, CA, and SMB has stared at an invoice template and asked: "Wait — do I charge CGST + SGST, or IGST?" Charge wrong, and your buyer's input tax credit gets stuck, your GSTR-1 mismatches, and you end up issuing credit notes a month later. Charge right, and the system flows itself. This 2026 guide gives you the one rule that decides everything, plus 5 worked examples and the 3 mistakes most people make.
What's in this guide
TL;DR — the 30-second answer
Same state → CGST + SGST (each at half the GST rate)
Different state → IGST (full GST rate)
The total GST is identical either way. A ₹10,000 invoice at 18% GST = ₹1,800 tax. The split is just how the ₹1,800 is recorded: as ₹900 CGST + ₹900 SGST (intra-state) or ₹1,800 IGST (inter-state). Your buyer claims input tax credit on whichever you charged. The total cost to them doesn't change. The Centre vs State accounting changes.
CGST, SGST, IGST — full forms and what each one funds
CGST — Central GST
Levied by the Central Government on intra-state sales. The revenue goes to the Centre. Governed by the CGST Act, 2017.
SGST — State GST
Levied by the State Government on intra-state sales. The revenue goes to the state where the sale happens. Each state has its own SGST Act.
IGST — Integrated GST
Levied by the Central Government on inter-state sales. The Centre keeps a portion and apportions the rest to the destination state via the GST Council settlement mechanism. Governed by the IGST Act, 2017.
The one rule that decides which tax applies
Before you charge any tax, answer one question: Where is the place of supply?
Compare the place-of-supply state with your registered GSTIN state (the first 2 digits of your GSTIN are your state code).
| Scenario | Tax to charge | Example rate (for 18% GST) |
|---|---|---|
| Same state (intra-state) | CGST 9% + SGST 9% | 9% + 9% = 18% total |
| Different state (inter-state) | IGST 18% | 18% total |
| Place of supply in a UT (without legislature) | CGST 9% + UTGST 9% | 9% + 9% = 18% total |
| Export of goods or services | IGST 0% (zero-rated) | Tax-free, but report under exports |
| Sale to a SEZ unit | IGST 0% (zero-rated) | Tax-free, but report under SEZ supplies |
5 real-world examples
Example 1 — Mumbai freelancer to Bengaluru client
Seller GSTIN starts with 27 (Maharashtra). Buyer is in Bengaluru — place of supply state code 29 (Karnataka). Different states → IGST. ₹50,000 design service at 18% = ₹9,000 IGST. Total invoice: ₹59,000.
Example 2 — Chennai agency to Chennai client
Seller and buyer both in Tamil Nadu (state code 33). Same state → CGST + SGST. ₹1,00,000 marketing retainer at 18% = ₹9,000 CGST + ₹9,000 SGST. Total invoice: ₹1,18,000.
Example 3 — Delhi consultant to Chandigarh client
Seller in Delhi (state code 07 — has legislature, levies SGST). Place of supply: Chandigarh (state code 04 — UT without legislature, levies UTGST). Different jurisdictions → IGST. The seller charges IGST because the supply crosses state/UT boundaries.
Example 4 — Pune agency invoicing US client (export of services)
Seller in Maharashtra. Recipient outside India. This is an export of services — IGST at 0% (zero-rated). The agency doesn't collect tax from the US client but reports the transaction in GSTR-1 under "exports" and can claim refund of input GST paid on related expenses.
Example 5 — Ahmedabad supplier delivering to a Mumbai SEZ unit
Seller in Gujarat (state code 24), buyer in Maharashtra SEZ. Cross-state and SEZ both qualify for zero-rating. IGST at 0%. Reported separately as a SEZ supply.
UTGST — when SGST gets replaced
The Union Territories of Andaman & Nicobar, Chandigarh, Dadra & Nagar Haveli and Daman & Diu, Lakshadweep, and Ladakh don't have legislatures, so they can't levy SGST. Instead, the Centre levies UTGST on intra-territory sales there. The rate and behaviour are identical to SGST.
The UTs of Delhi, Puducherry, and Jammu & Kashmir do have legislatures, so they levy SGST like states. If you're invoicing within Delhi, charge CGST + SGST (not UTGST).
Top 3 mistakes that cost real money
Mistake 1 — Using the buyer's billing address instead of place of supply
For services, the place of supply is usually the recipient's location, but for transport, immovable property, online streaming, and events, it's defined by special rules. Charging CGST+SGST based on the billing address when the actual place of supply is in another state creates a mismatch that flagged in your buyer's GSTR-2A reconciliation.
Mistake 2 — Forgetting that exports are zero-rated, not exempt
An "exempt" supply means no input tax credit on related expenses. A "zero-rated" supply (exports, SEZ) means you charge 0% IGST and can claim refund of input GST paid. Mark exports correctly to recover that refund.
Mistake 3 — Manual splits in Excel
Hand-calculating a 9% + 9% split on a ₹47,318 invoice with reverse charge and HSN code is exactly how typos happen. One wrong digit in the place-of-supply state code, and the entire invoice's tax type flips. We've seen freelancers issue 6 corrected invoices in a month from this single error.
How to auto-detect the right GST split on every invoice
The rule is mechanical, so a tool can do it perfectly. Here's the logic:
- Read the seller's GSTIN. Take the first 2 characters as the seller's state code.
- Read the place of supply (defaults to the buyer's state for goods; defined by Section 12 IGST Act for services).
- If the two state codes match → split into CGST + SGST (or CGST + UTGST if the place of supply is a UT-without-legislature).
- If they don't match → IGST.
- If the supply is an export of goods/services or a sale to an SEZ → IGST at 0% (zero-rated).
Our GST Invoice Generator runs this logic automatically. You type "raise an invoice for Reliance, ₹25,000, web design, Mumbai" and the tool reads your GSTIN, identifies the place of supply as Maharashtra (27), compares with your registered state, and picks CGST + SGST or IGST without you ever touching a calculator. The right HSN code, amount-in-words, and GSTR-1 ledger entry come along automatically.
Try the auto-CGST/SGST/IGST detector — ₹9,999 lifetime →Frequently asked questions
What is the difference between CGST, SGST, and IGST?
CGST and SGST are charged on intra-state sales (each at half the GST rate). IGST is charged on inter-state sales (full GST rate). The total tax is identical — only the Centre/State split differs.
When do I charge CGST + SGST instead of IGST?
Charge CGST + SGST when the place of supply is in the same state as your registered GSTIN. Charge IGST when the place of supply is in a different state, a Union Territory, or an export/SEZ supply.
What is UTGST and where does it apply?
UTGST replaces SGST in Union Territories without a legislature: A&N Islands, Chandigarh, DNH & DD, Lakshadweep, and Ladakh. Delhi, Puducherry, and J&K levy SGST instead of UTGST.
Is the total tax higher when I charge IGST instead of CGST + SGST?
No. 18% GST = 9% CGST + 9% SGST OR 18% IGST. Total to the buyer is identical. Only the government accounting differs.
What happens if I charge the wrong type of GST?
You must issue a credit note for the wrong invoice and raise a fresh invoice with the correct tax type. Mismatches in GSTR-1 delay your buyer's input tax credit and may trigger reconciliation notices.
Does the place of supply ever differ from the buyer's state?
Yes — for transport, immovable property, events, and online services. Section 10 of the IGST Act defines place of supply for goods; Section 12 defines it for services. Always check the specific rule for unusual supplies.
How do I auto-detect the right GST split on every invoice?
Use a tool that compares the seller's GSTIN state code (first 2 digits) to the place-of-supply state code. Match = CGST + SGST. Mismatch = IGST. ByteZBridge's GST Invoice Generator does this automatically from natural-language input.