Difference Between CGST, SGST and IGST, With Examples (2026)

When to charge CGST + SGST and when to charge IGST, decided the way the law decides it: by place of supply. Worked examples, the input credit order, and what to do if you got it wrong.

Every GST bill in India carries one of two tax splits: CGST + SGST, or IGST. Charge the wrong one and the tax amount is still correct, yet the bill is still wrong. The money goes to the wrong government account, your buyer's input tax credit gets stuck, and fixing it means paying the right tax again and waiting for a refund of the wrong one.

The difference between CGST, SGST and IGST is simple once you see the single question that decides it. This guide explains that question, works through seven real billing situations (including the over-the-counter sale that trips up most shops), shows how the split appears on an invoice and in your returns, and covers the order in which each credit can be used.

Quick answer

Tax	Full name	Charged on	Collected by	Rate
CGST	Central Goods and Services Tax	Sales within a state	Central government	Half the GST rate
SGST	State Goods and Services Tax	Sales within a state	That state's government	Half the GST rate
UTGST	Union Territory Goods and Services Tax	Sales within certain Union Territories	That UT	Half the GST rate (replaces SGST)
IGST	Integrated Goods and Services Tax	Sales between states, imports, exports, SEZ supplies	Central government, then shared with the destination state	The full GST rate

In one line: if the supplier's location and the place of supply are in the same state, charge CGST + SGST; if they are in different states, charge IGST. At 18%, that is 9% CGST + 9% SGST, or 18% IGST. The total tax is the same either way.

What each tax actually is

GST is one tax on paper but several taxes in law, because India's Constitution lets both the Centre and the states tax the supply of goods and services.

CGST is levied under the Central Goods and Services Tax Act, 2017. It applies to supplies within a state (intra-state), and the revenue goes to the Centre.

SGST is levied under each state's own GST Act. It applies to the same intra-state supply, at the same rate as CGST, and the revenue goes to that state.

UTGST is levied under the Union Territory Goods and Services Tax Act, 2017. It replaces SGST in Union Territories that do not have their own legislature: Andaman and Nicobar Islands, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu, Ladakh and Chandigarh. Delhi, Puducherry and Jammu and Kashmir have legislatures, so they charge SGST, not UTGST.

IGST is levied under the Integrated Goods and Services Tax Act, 2017. It applies to inter-state supplies, imports, exports and supplies to SEZ units. The Centre collects it and then settles the state share with the state where the goods or services are consumed. That is why GST is called a destination-based tax: the tax follows the customer, not the seller.

The one question that decides it: where is the place of supply?

Most people think the split depends on where the buyer lives. It does not. It depends on two things:

The location of the supplier (where your registered business is), and
The place of supply, which the law defines separately for goods and for services.

If both are in the same state, the supply is intra-state: CGST + SGST. If they are in different states, it is inter-state: IGST.

For goods (Section 10 of the IGST Act), the main rules are:

Goods that move: the place of supply is where the movement ends, meaning where the goods are delivered.
Bill-to-ship-to: if you deliver goods to a third party on the instruction of your buyer, the place of supply is the buyer's (bill-to party's) principal place of business.
Goods that do not move, such as a sale over the counter where the customer carries the goods away: the place of supply is where the goods are at the time of delivery, which is your shop.
Goods installed or assembled at a site: the place of supply is that site.

For services (Section 12 of the IGST Act), the general rules are:

To a registered business: the place of supply is the recipient's location.
To an unregistered person: the recipient's address on record, or the supplier's location if there is none.
Specific services follow their own rules. Services tied to immovable property, for example, go by where the property is, and restaurant services by where they are performed.

Seven worked examples

All examples use an 18% rate on a taxable value of ₹10,000, so the total tax is always ₹1,800. Watch only how it is split.

Example 1: a shop sells to a customer in the same city

A grocery in Pune sells to a customer in Pune and delivers to their home.

Supplier: Maharashtra. Place of supply: Maharashtra.
CGST 9% = ₹900, SGST 9% = ₹900.

Example 2: a wholesaler ships to a buyer in another state

A textile wholesaler in Surat (Gujarat) ships fabric to a retailer in Jaipur (Rajasthan).

Supplier: Gujarat. Place of supply: Rajasthan, where the movement ends.
IGST 18% = ₹1,800.

Example 3: a tourist from another state buys over the counter

A visitor from Kerala buys a silk saree at a shop in Kanchipuram (Tamil Nadu) and carries it home.

Supplier: Tamil Nadu. Place of supply: Tamil Nadu, because the goods were handed over at the shop.
CGST 9% = ₹900, SGST 9% = ₹900.

This is the case most shops get wrong. The customer's home state does not matter for an over-the-counter sale, even if they give a Kerala address or a Kerala GSTIN. What matters is where delivery happened.

Example 4: bill to one state, ship to another

A Delhi company orders 50 chairs from a Bengaluru manufacturer and asks for them to be delivered straight to its branch in Chennai.

Supplier: Karnataka. Place of supply: Delhi, the bill-to party's location.
IGST 18% = ₹1,800, with the delivery address (Chennai) printed separately on the invoice.

Example 5: a consultant bills a client in another state

A chartered accountant registered in Hyderabad (Telangana) bills a registered client in Mumbai (Maharashtra) for an audit.

Supplier: Telangana. Place of supply: Maharashtra, the registered recipient's location.
IGST 18% = ₹1,800.

Example 6: a supply to an SEZ unit in the same state

A Chennai supplier sells components to a unit inside an SEZ in Chennai.

Supplies to SEZ units and developers are treated as inter-state by law (Section 7(5) of the IGST Act), even within the same state.
IGST, or zero-rated under a bond or Letter of Undertaking (LUT), with the SEZ endorsement on the invoice.

Example 7: a sale in a Union Territory without a legislature

A shop in Chandigarh sells to a customer in Chandigarh.

Supplier and place of supply are both in Chandigarh, a UT without a legislature.
CGST 9% = ₹900, UTGST 9% = ₹900.

How the split works at each GST rate

From 22 September 2025, most goods and services fall into the 5% or 18% slab, luxury and sin goods into a 40% rate, and essentials into nil. A few special rates remain, such as 3% on gold. The intra-state split is always exactly half and half.

GST rate	Intra-state: CGST + SGST/UTGST	Inter-state: IGST	Tax on ₹10,000
0%	0% + 0%	0%	₹0
3%	1.5% + 1.5%	3%	₹300
5%	2.5% + 2.5%	5%	₹500
18%	9% + 9%	18%	₹1,800
40%	20% + 20%	40%	₹4,000

If an item in your billing software still shows 12% or 28%, check its current rate before you bill it. Most goods in those old slabs moved to 5%, 18% or 40% in the 2025 reform.

How the split appears on the invoice

Rule 46 of the CGST Rules requires the invoice to show the rate and amount of each tax separately, and, for an inter-state supply, the place of supply with the state name. A single line reading "GST 18%" is not enough on an intra-state bill.

An intra-state bill ends like this:

Taxable value         10,000.00
CGST @ 9%                900.00
SGST @ 9%                900.00
Invoice total         11,800.00
Place of supply: Maharashtra (27)

And an inter-state bill like this:

Taxable value         10,000.00
IGST @ 18%             1,800.00
Invoice total         11,800.00
Place of supply: Rajasthan (08)

Our guide to the GST invoice format covers the rest of the fields field by field, with a full sample bill.

Using input tax credit: the order matters

When you buy, you pay CGST, SGST or IGST. When you sell, you owe CGST, SGST or IGST. Input tax credit (ITC) lets you set off what you paid against what you owe, but not in any order you like. Sections 49, 49A and 49B of the CGST Act and Rule 88A set the order:

IGST credit is used first, against IGST payable, and then against CGST and SGST (or UTGST) in any order.
CGST credit is used against CGST, and then against IGST.
SGST/UTGST credit is used against SGST/UTGST, and then against IGST, but only after the CGST credit is used up.
CGST credit can never pay SGST, and SGST credit can never pay CGST.

A worked example. In a month you have:

ITC available: IGST ₹5,000, CGST ₹2,000, SGST ₹2,000
Tax payable: IGST ₹3,000, CGST ₹3,000, SGST ₹3,000

Set-off: IGST credit pays the ₹3,000 IGST, and the remaining ₹2,000 of it can be split between CGST and SGST, say ₹1,000 each. CGST credit of ₹2,000 then pays the remaining ₹2,000 CGST. SGST credit of ₹2,000 pays the remaining ₹2,000 SGST. Nothing is paid in cash.

Change one number, with SGST payable at ₹5,000 and CGST payable at ₹1,000, and the picture changes. You cannot move spare CGST credit across to SGST, so you may pay SGST in cash while CGST credit sits unused. This is why a seller who charges CGST + SGST when the sale should have been IGST affects the buyer's credit too.

Reporting the split in your returns

GSTR-1 (your outward supplies) records each invoice with its place of supply. B2B invoices are reported invoice by invoice with the buyer's GSTIN. Inter-state B2C sales above ₹1 lakh per invoice are reported individually, and smaller B2C sales are reported in summary by state and rate. The HSN summary in Table 12 shows the taxable value with IGST, CGST and SGST amounts against each HSN code.

GSTR-3B (your summary return) shows the total tax payable under each head and how it is paid, from credit or in cash, following the order above.

If your billing app keeps the split right on every bill, these returns largely build themselves. If it does not, your accountant ends up correcting it invoice by invoice.

What if you charged the wrong tax?

It happens: an over-the-counter sale billed as IGST, or a delivery to another state billed as CGST + SGST.

The law's position is that tax paid under the wrong head is not adjusted, it is refunded. Under Section 77 of the CGST Act (and Section 19 of the IGST Act), you:

Pay the correct tax under the right head, without interest on that amount, and
Claim a refund of the tax wrongly paid, which must be claimed within two years of paying the correct tax (Rule 89).

Meanwhile, your buyer may not be able to use the credit as they expected. In practice, catch it before the return is filed. Issue a credit note against the wrong invoice and a fresh invoice with the right split in the same tax period, and talk to your CA if the period has already closed.

Common mistakes with CGST, SGST and IGST

These are the errors that come up again and again when accountants review a small business's bills:

Deciding by the buyer's GSTIN, not the place of supply. The first two digits of a GSTIN tell you where the buyer is registered, not where the goods were delivered. For an over-the-counter sale or a bill-to-ship-to order, the two can differ.
Printing one "GST 18%" line on an intra-state bill. The invoice must show CGST and SGST separately, each with its own rate and amount.
Leaving out the place of supply on inter-state bills. Without it, nobody reading the bill can check that IGST was right.
Using a combined "GST" ledger in the books. If your accounts do not keep CGST, SGST and IGST apart, the credit set-off order cannot be followed and GSTR-3B becomes guesswork.
Assuming a Union Territory charges SGST. In Chandigarh, Ladakh and the other UTs without a legislature, it is UTGST.

How billing software avoids the mistake

The wrong split is almost always a human shortcut: the rate was typed in by hand, or the customer's state was assumed from their GSTIN. Good billing software removes both shortcuts. It looks at your registered state and the place of supply of that particular bill, and splits the tax for you.

BillZap does exactly that, and it shows you which split it chose (CGST + SGST or IGST) on the invoice screen before you save. So the over-the-counter sale to a visitor from another state stays CGST + SGST unless you mark it for delivery elsewhere. It works on an Android phone, fully offline, with no account. Each month's bills roll into a GST summary split into taxable value, CGST, SGST and IGST that your CA can use for GSTR-1. It is free, and if you are weighing it against other tools, our comparison of GST billing apps is a fair place to start.

FAQ: CGST, SGST and IGST

What is the difference between CGST, SGST and IGST?

CGST and SGST are charged together on a sale within one state, each at half the GST rate; CGST goes to the Centre and SGST to the state. IGST is charged at the full rate on a sale between two states, on imports and on SEZ supplies, and is shared between the Centre and the destination state.

How do I know whether to charge IGST or CGST and SGST?

Compare your registered state with the place of supply. If they match, charge CGST + SGST. If they differ, charge IGST. For goods that are delivered, the place of supply is where delivery ends; for an over-the-counter sale, it is your shop.

Is IGST higher than CGST plus SGST?

No. IGST equals CGST plus SGST. At 18%, IGST is 18%, and CGST + SGST is 9% + 9% = 18%. Only the split and the government receiving the tax change.

Can I use CGST credit to pay SGST?

No. CGST credit can be used for CGST and then IGST, and SGST credit for SGST and then IGST. Credit cannot cross between CGST and SGST.

What is UTGST and when is it charged?

UTGST replaces SGST on sales within Union Territories that have no legislature: Andaman and Nicobar Islands, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu, Ladakh and Chandigarh. It is charged alongside CGST at half the rate.

What happens if I charge IGST instead of CGST and SGST?

You must pay the correct CGST and SGST and claim a refund of the IGST wrongly paid, under Section 77 of the CGST Act and Section 19 of the IGST Act. No interest is charged on the correctly paid tax, but your buyer's credit may be affected, so correct it as early as possible.

The bottom line

The difference between CGST, SGST and IGST comes down to one comparison: your state against the place of supply. Same state, split it in half as CGST + SGST (or CGST + UTGST); different state, charge it all as IGST. The tax amount does not change. The hard cases are the over-the-counter sale, bill-to-ship-to orders and SEZ supplies, and they are exactly where an app that works out the place of supply for you earns its keep.

If you want that done automatically, offline and for free, get BillZap on Google Play.

This article explains GST rules in plain language and is not tax advice. For a specific transaction, especially services with special place-of-supply rules, confirm with your chartered accountant.

CGST, SGST and IGST: The Difference, With Worked Examples (2026)