CGST vs SGST vs IGST: Key Differences Explained Simply (2026)

If you've ever raised a GST invoice and wondered "Should I write CGST + SGST or IGST?" — you're not alone. This is one of the most common confusions for new GST registrants in India. Get this wrong and you'll have compliance headaches during return filing.

This guide explains the difference in plain language, with examples and a simple rule to remember forever.

The One Rule You Must Remember

That's it. The rest is just understanding what each tax is and where the money goes.

What is CGST?

CGST stands for Central Goods and Services Tax. It is collected by the Central Government of India. When you make a sale within the same state, half the GST goes to the Centre as CGST.

• Governed by: The CGST Act, 2017
• Goes to: Central Government
• Applied on: Intra-state (same state) transactions
• Rate: Always half of the total GST rate

What is SGST?

SGST stands for State Goods and Services Tax. It is collected by the State Government where the sale happens. It is charged alongside CGST — always in equal proportion.

• Governed by: Respective State GST Act
• Goes to: State Government
• Applied on: Intra-state transactions
• Rate: Always half of the total GST rate (same as CGST)

What is IGST?

IGST stands for Integrated Goods and Services Tax. It is charged on inter-state transactions — when you sell to a buyer in a different state. The revenue first goes to the Centre, which then distributes the state's share.

• Governed by: The IGST Act, 2017
• Goes to: Central Government (then shared with destination state)
• Applied on: Inter-state transactions and imports
• Rate: Equal to the total GST rate (e.g., 18%)

Quick Comparison Table

Feature	CGST	SGST / UTGST	IGST
Full Form	Central GST	State / UT GST	Integrated GST
When charged	Intra-state	Intra-state	Inter-state
Revenue goes to	Centre	State / UT	Centre (then state)
Rate (if GST = 18%)	9%	9%	18%
Rate (if GST = 12%)	6%	6%	12%
Rate (if GST = 5%)	2.5%	2.5%	5%

Real-World Examples

How to Know If It's Intra-State or Inter-State?

Compare the GSTIN of the seller and buyer. The first 2 digits of a GSTIN represent the state code:

• If both GSTINs start with the same 2 digits → Intra-state → use CGST + SGST
• If the 2 digits are different → Inter-state → use IGST

Example: A seller with GSTIN 27XXXXX (Maharashtra) selling to a buyer with GSTIN 29XXXXX (Karnataka) = inter-state = IGST.

ITC (Input Tax Credit) Rules

Getting the CGST/SGST/IGST split right also matters for claiming Input Tax Credit (ITC):

Tax Paid	Can be used to offset
IGST	IGST, then CGST, then SGST
CGST	CGST, then IGST (not SGST)
SGST / UTGST	SGST/UTGST, then IGST (not CGST)

Common Mistakes to Avoid

• ❌ Charging CGST + SGST on an inter-state invoice — This is wrong and creates ITC issues for your buyer
• ❌ Charging IGST on an intra-state invoice — Also wrong and creates reconciliation problems in GSTR-3B
• ❌ Forgetting UTGST in Union Territories — Many confuse Delhi and Chandigarh as states

Frequently Asked Questions

Can I charge both IGST and CGST+SGST on the same invoice?

No. You charge either IGST or CGST+SGST — never both on the same line item. Each supply is either intra-state or inter-state.

What if I charge the wrong tax type?

You'll need to issue a credit note and a corrected invoice. Your buyer won't be able to claim correct ITC with a wrong invoice. In serious cases, there are penalties under the GST Act.

Does the total tax amount differ between IGST and CGST+SGST?

No — the total tax burden for the buyer is exactly the same. On ₹10,000 at 18%, you pay ₹1,800 either way. The difference is only in where the tax is deposited (Centre vs. Centre + State).

Is import treated as inter-state?

Yes. Imports into India are treated as inter-state supplies and are subject to IGST (plus customs duty separately).