CGST, SGST and IGST: Which One Goes on Your Bill?
Sell inside your own state and you charge CGST plus SGST. Sell to another state and you charge IGST. Here is the difference, how to decide for each bill, and worked ₹ examples at 5% and 18% GST.
BillBabu Team
BillBabu App Team
In short
- CGST is Central GST and SGST is State GST. You charge both, half the rate each, when you sell inside your own state.
- IGST is Integrated GST. You charge it, at the full rate, when you sell to a customer in another state.
- The total tax is the same either way. Only the split changes: an 18% item is CGST 9% + SGST 9%, or IGST 18%.
- To decide, compare your business state with the place of supply, which is usually where the goods are delivered.
What CGST, SGST and IGST mean
GST is one tax, but it is shared between the Centre and the states. The three names on a bill tell the government who gets which part.
- CGST (Central Goods and Services Tax) goes to the central government.
- SGST (State Goods and Services Tax) goes to the state where the sale happens.
- UTGST (Union Territory GST) replaces SGST in union territories that have no legislature: Chandigarh, Ladakh, Lakshadweep, Andaman and Nicobar Islands, and Dadra and Nagar Haveli and Daman and Diu. Delhi, Puducherry and Jammu and Kashmir use SGST.
- IGST (Integrated Goods and Services Tax) is collected by the Centre on sales between states, and the state where the goods are used gets its share later.
Your customer does not pay more because of the split. On any bill, either CGST and SGST appear together, or IGST appears alone. Never both on the same line.
The one rule: your state vs the place of supply
Every sale has a place of supply. If it is in the same state as your registered business, the sale is intra-state and you charge CGST + SGST. If it is in a different state, the sale is inter-state and you charge IGST.
For most small businesses the place of supply is easy to find:
- Goods you deliver or send: the place where the delivery ends. A Pune shop that sends goods to a buyer in Surat makes an inter-state sale.
- Goods sold over the counter: your shop. A customer from Karnataka who buys at your Mumbai counter and carries the goods away still pays CGST + SGST.
- Most services to a registered business: the location of the business you bill. Services to an individual usually follow their address on record. Some services, such as those linked to a building or an event, have their own rules, so check those with your CA.
Do not go by the billing address alone. If a Delhi company asks you to deliver to its warehouse in Haryana, the place of supply is Haryana.
Worked example: the same ₹10,000 sale, two ways
Sharma Electricals in Maharashtra sells ceiling fans worth ₹10,000 (before tax). Fans are taxed at 18%.
| Line on the bill | Buyer in Pune (Maharashtra) | Buyer in Ahmedabad (Gujarat) |
|---|---|---|
| Taxable value | ₹10,000 | ₹10,000 |
| CGST 9% | ₹900 | None |
| SGST 9% | ₹900 | None |
| IGST 18% | None | ₹1,800 |
| Bill total | ₹11,800 | ₹11,800 |
The same works at 5%. Ghee worth ₹4,000 sold in your own state is billed with CGST 2.5% (₹100) and SGST 2.5% (₹100). Sold to another state, it carries IGST 5% (₹200). The total is ₹4,200 either way.
If one bill has items at different rates, split each rate separately. A same-state bill with ₹4,000 of ghee at 5% and ₹10,000 of fans at 18% shows CGST of ₹100 + ₹900 = ₹1,000 and SGST of ₹1,000, so ₹2,000 of tax in all.
CGST, SGST and IGST at a glance
| CGST + SGST | IGST | |
|---|---|---|
| When you charge it | Sale inside your state | Sale to another state, or to a union territory from a state |
| Rate on an 18% item | 9% + 9% | 18% |
| Rate on a 5% item | 2.5% + 2.5% | 5% |
| Who gets the tax | Centre and your state, half each | Centre first, then shared with the buyer's state |
| Buyer's input tax credit | Yes, if the buyer is registered | Yes, if the buyer is registered |
How input tax credit uses each tax
If you are registered, the GST you pay on purchases (input tax credit) reduces the GST you owe on sales. The credit is used in a fixed order. IGST credit is used first for IGST, and any balance can pay CGST or SGST. CGST credit can pay CGST or IGST, but never SGST. SGST credit can pay SGST or IGST, but never CGST.
You do not work this out on each bill; your CA or the GST portal does it in the monthly return. What you can control is charging the right tax on every bill, because that decides which bucket your buyer's credit lands in.
Common mistakes and how to avoid them
- Charging IGST to a local walk-in customer because their address is in another state. Over-the-counter sales take your state.
- Charging CGST + SGST on goods you courier to another state. The delivery state decides, so it is IGST.
- Doubling the rate. An 18% item is CGST 9% + SGST 9%, not 18% + 18%.
- Picking the wrong state for a registered buyer. The first two digits of a GSTIN are the state code (27 is Maharashtra, 24 is Gujarat). If they do not match the delivery state, ask the buyer where the goods are going.
If you charge the wrong type of tax, the fix is not a simple adjustment: you have to pay the right tax and claim back the wrong one. It is far easier to get it right on the bill.
How BillBabu picks the tax for you
In the BillBabu app, each party (customer or supplier) has a state, and your business has a state. When you make an invoice for a party, BillBabu compares the two and shows "Intra-State Transaction (CGST + SGST)" or "Inter-State Transaction (IGST)" in the tax summary before you save. Each item's GST rate comes from your product list, so the split is worked out line by line.
For a quick check without the app, our free GST calculator shows the CGST + SGST or IGST split for any amount and rate. If you are not sure which rate applies to an item, start with the current GST rates and how to find the HSN code. Before you bill a new registered buyer, check their GSTIN so the state code is right.
GST rates and rules checked on 4 October 2026, under the GST 2.0 rates in force since 22 September 2025. Rates can depend on the exact item, its price or its packing, so confirm your item in the CBIC rate notification or with your CA.
Frequently asked questions
Is IGST higher than CGST plus SGST?
No. IGST is the full rate, and CGST plus SGST add up to the same full rate. On an 18% item the customer pays 18% either way.
Can one invoice have both IGST and CGST + SGST?
No. The place of supply is the same for the whole invoice, so all its lines are either intra-state or inter-state. If you deliver to two states, make two invoices.
A customer from another state buys at my shop. Which tax do I charge?
CGST + SGST. For over-the-counter sales the place of supply is your shop, even if the customer lives elsewhere.
What is UTGST and when do I charge it?
UTGST is charged in place of SGST in union territories without their own legislature, such as Chandigarh or Ladakh. A sale inside Chandigarh carries CGST + UTGST. Delhi and Puducherry use SGST.
Do I need the buyer's GSTIN to charge IGST?
No. IGST depends on the place of supply, not on whether the buyer is registered. A delivery to an individual in another state also carries IGST.
Get the tax split right on every bill. BillBabu is a GST billing app for Android, with a web app at app.billbabu.com. Make GST invoices and estimates, share them as PDFs and see who still owes you money. Every account starts with a 14-day free trial, and you do not need a card. Get BillBabu on Google Play or see plans and prices.
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