CGST vs SGST vs IGST: How GST Tax Splits Actually Work

The decision rule is simple: if your business and your customer are registered in the same state, you charge CGST + SGST, split evenly. If they're in different states, you charge IGST instead — one line, at the full rate. The total tax a customer pays is identical either way; only how it's divided (and which government collects it) changes.

The quick answer

GST on a taxable sale is split three ways depending on where the sale happens. Same state: CGST (Central GST) + SGST (State GST), each exactly half the total rate — an 18% sale becomes 9% CGST + 9% SGST. Different states: IGST (Integrated GST), the full rate as a single line. The split is determined by place of supply, not by where your office happens to be registered for other purposes. Union territories without their own legislature use UTGST in place of SGST, working identically.

What the law says: intra-state vs inter-state supply

The split comes straight from the Acts, not from convention:

• Intra-state supply (Section 8 of the IGST Act, 2017): the supplier's location and the place of supply are in the same state or union territory. Tax is levied as CGST under Section 9 of the CGST Act plus SGST or UTGST under the matching state or UT law.
• Inter-state supply (Section 7 of the IGST Act): the supplier's location and the place of supply are in different states or union territories. Tax is levied as IGST under Section 5 of the IGST Act. Imports, exports and supplies to or from an SEZ are also treated as inter-state.
• Place of supply is fixed by Section 10 (goods) and Section 12 (services, where supplier and recipient are both in India) of the IGST Act. The tests are different for goods and services, which is why a customer's billing address alone can mislead you.

When do I charge CGST + SGST instead of IGST?

CGST + SGST applies when the place of supply and your registered state are the same. For most straightforward sales — a shop selling to a local customer, a freelancer billing a client registered in the same state — this is determined by comparing your GSTIN's state code (the first two digits, see the full state code list) to your customer's GSTIN state code. If they match, it's an intra-state supply: CGST + SGST.

When does IGST apply instead?

IGST applies whenever the place of supply falls in a different state or union territory from your own registered state — the most common case being a customer registered in another state. It also applies to exports and supplies to/from Special Economic Zones, and to any inter-state stock transfer between branches of the same business. IGST is charged as one combined line at the full GST rate, rather than split into two.

How is "place of supply" actually determined?

For most goods, place of supply is the location where the goods are delivered. For most services, it's generally the location of the recipient (if registered) or, if unregistered, the recipient's address on record. There are specific exceptions — for example, services tied to immovable property use the property's location — so for anything other than a straightforward goods sale or a standard service invoice, it's worth confirming the exact rule that applies on the GST portal or with a tax professional, since getting this wrong is what leads to the CGST/SGST-vs-IGST correction problem covered in the FAQ below.

Edge cases that change the split

Worked example: same-state sale

A Maharashtra-registered business sells ₹10,000 of goods to a customer also registered in Maharashtra, at 18% GST:

Worked example: inter-state sale

The same ₹10,000 sale, but the customer is registered in Karnataka instead:

Same total, same effective rate — only the tax structure on the invoice changes. QWIK INVOICE's invoice generator detects this automatically from your and your customer's GSTIN, so you never have to work out the split by hand.

CGST vs SGST vs IGST at a glance

Worked example: one invoice, two GST rates

Real invoices mix rates. A Maharashtra supplier bills a customer ₹4,000 of goods at 5% and ₹6,000 of goods at 18%. Each line is taxed at its own rate, then the tax is split according to the state test:

The customer pays ₹11,280 in both cases. A correct invoice shows the rate-wise breakup, which is why the invoice format checklist asks for the tax rate on every line, and you can produce this layout in the GST invoice generator.

Why the split matters after the invoice: how credit gets used

The buyer's input tax credit keeps CGST, SGST and IGST in separate ledgers, and the rules for setting one off against another are fixed by Section 49 of the CGST Act and Rule 88A of the CGST Rules:

That is why an invoice with the wrong split is more than a formatting slip. A buyer who receives CGST + SGST when IGST was due may be left with credit in the wrong ledger, and fixing it means the supplier pays the correct tax and claims a refund of the wrong one, as covered in the FAQ.

Common mistakes to avoid

• Charging CGST/SGST by default because your business is registered in one state, without checking the customer's registered state or delivery location.
• Forgetting that place of supply — not billing address alone — governs the split for certain service categories (see above).
• Applying the correct rate but the wrong split, which under- or over-collects for the wrong government and requires a correction later (see FAQ).
• Not checking whether the item or service needs an HSN or SAC code on the invoice at all — this is a separate requirement from the CGST/SGST/IGST split, covered in our HSN/SAC guide.

One more case worth knowing: for certain notified categories, the recipient — not the supplier — is responsible for paying GST directly. That's the reverse charge mechanism, covered in detail in our reverse charge guide for freelancers.