Last updated: 25 July 2026 · Sources checked via live search this session
The Short Answer
India charges GST in two possible shapes, depending on where the buyer and seller are located — never a third option, and never both at once:
Same state (intra-state): the GST rate splits exactly in half between CGST (Central GST, goes to the Central Government) and SGST (State GST, goes to that State Government). At 18% GST, that's 9% CGST + 9% SGST.
Different states, or an import/export (inter-state): the full rate is charged as a single IGST (Integrated GST), collected by the Central Government and then shared with the destination state. At 18% GST, that's 18% IGST — not 9%+9%.
Use our GST Calculator to compute either split instantly, or our Place of Supply Finder if you're not sure which one applies to a specific transaction.
Worked Example
A shop in Ahmedabad, Gujarat sells a product worth ₹5,000 (before tax) at 18% GST.
Sold to a customer in Gujarat (intra-state): CGST ₹450 (9%) + SGST ₹450 (9%) = ₹900 total tax. Invoice total: ₹5,900.
Sold to a customer in Rajasthan (inter-state): IGST ₹900 (18%, single line). Invoice total: ₹5,900.
Notice the customer pays the same ₹5,900 either way — GST 2.0 didn't change that. What changes is which government department the tax is filed under, and which specific tax head appears on the invoice. Getting the head wrong on an invoice (e.g. charging IGST for an intra-state sale) is a real, common filing error — see the Common Mistakes section below.
What About UTGST?
UTGST (Union Territory GST) is SGST's equivalent for a Union Territory that has no legislature of its own — for example Chandigarh or Lakshadweep. It pairs with CGST exactly the way SGST does for a sale within that UT. Delhi and Puducherry, which do have their own legislatures, use SGST like a state, not UTGST.
How the Correct Tax Head Is Decided
The deciding factor is the place of supply — a defined set of rules (not simply "where the shop is") that determine which state's tax applies. For most straightforward goods sales, place of supply is the delivery location. For services, and for more complex cases (goods delivered to a third party, services linked to immovable property, and others), the rules get more specific. This guide covers the general CGST/SGST vs IGST split; for the place-of-supply rules themselves, see our Place of Supply Finder.
Input Tax Credit (ITC) Utilisation Order
The three tax heads aren't fully interchangeable when you claim input tax credit:
IGST credit — the most flexible: can offset IGST liability first, then CGST, then SGST.
CGST credit — can only offset CGST liability, then IGST liability. Never SGST.
SGST credit — can only offset SGST liability, then IGST liability. Never CGST.
CGST credit can never be used against SGST liability, or vice versa — this trips up a lot of manual reconciliation. Our GST ITC Calculator applies this order automatically.
Common Invoicing Mistakes
Charging IGST on an intra-state sale, or CGST+SGST on an inter-state sale. This is the single most common tax-head error. It can block the buyer's ability to claim ITC correctly and may draw a mismatch notice. The fix is a credit note and a corrected invoice with the right tax head — not a workaround.
Assuming GST 2.0 changed this framework. It didn't. GST 2.0 (effective 22 September 2025) simplified the rate slabs (0%/5%/18%/40%); the CGST/SGST/IGST split and place-of-supply rules are unchanged.
Sources
Facts in this guide were checked via live search against multiple current, independent sources describing the CGST/SGST/IGST framework, the ITC utilisation order, and the UTGST distinction, cross-checked for consistency with each other and with this site's own GST Calculator content. This guide explains general mechanics; it is not a substitute for checking a specific transaction's place of supply against the CGST Act, 2017 and IGST Act, 2017, or consulting a GST practitioner for anything with real filing consequences.
Frequently Asked Questions
What is the difference between CGST and SGST?
Both apply together on an intra-state sale (buyer and seller in the same state), splitting the total GST rate equally: CGST is collected by the Central Government, SGST by the State Government where the sale happens. At 18% GST, that is 9% CGST plus 9% SGST.
When does IGST apply instead of CGST and SGST?
IGST applies on inter-state sales (buyer and seller in different states), plus imports and exports. Instead of splitting the rate, the full GST rate is charged as a single IGST amount, collected by the Central Government and then shared with the destination state.
What is UTGST?
UTGST is the SGST-equivalent for a Union Territory that does not have its own legislature (e.g. Chandigarh, Lakshadweep). It pairs with CGST the same way SGST does, for a sale within that UT.
Did GST 2.0 change how CGST, SGST and IGST work?
No. GST 2.0 (effective 22 September 2025) changed the rate slabs themselves, not the CGST/SGST/IGST framework or the place-of-supply rules that decide which one applies — those work exactly as before.
Related Tools
GST Calculator · Reverse GST Calculator · Place of Supply Finder · GST ITC Calculator