Every GST invoice charges either CGST and SGST together, or IGST alone. Choosing the wrong one is one of the most common billing mistakes. The rule is simple once you know which two states to compare.
The three taxes
- CGST (Central GST) goes to the Central Government.
- SGST (State GST) goes to the state where the supply is made. In Union Territories without a legislature it is called UTGST.
- IGST (Integrated GST) is charged on inter-state supplies, and on imports and exports; it is shared between the Centre and the destination state.
How to decide: supplier location vs place of supply
Compare the state of the supplier (you) with the place of supply. For most sales of goods the place of supply is where the goods are delivered; for services the rules are more detailed, and for B2B services it is generally the location of the recipient.
| Situation | Tax to charge |
|---|---|
| Your state and place of supply are the same state | CGST + SGST (half of the rate each) |
| Your state and place of supply are different states | IGST (the full rate) |
Worked example
You sell goods with a taxable value of ₹10,000 at an example GST rate of 18%.
| Within one state | To another state | |
|---|---|---|
| Taxable value | ₹10,000 | ₹10,000 |
| CGST 9% | ₹900 | — |
| SGST 9% | ₹900 | — |
| IGST 18% | — | ₹1,800 |
| Invoice total | ₹11,800 | ₹11,800 |
The customer pays the same total either way; what changes is how the tax is split and which columns appear on the invoice.
What the invoice must show
Show each tax separately by rate, the place of supply with the state name and code, and your and the buyer's GSTIN. The first two digits of a GSTIN are the state code, which is a quick way to see whether a sale is inter-state.
Let the software decide
In Rashtra Bill you save each customer with their state and GSTIN. On a new invoice the tax type is picked automatically from your state and the place of supply, so you cannot forget to switch from CGST + SGST to IGST. Try the free GST calculator to see the split for any amount.
Frequently asked questions
Is the GST rate different for CGST and SGST?
No. CGST and SGST are each half of the GST rate for the item. At an 18% rate, CGST is 9% and SGST is 9%. IGST equals the full rate.
What if I deliver to a different state than the buyer's registered address?
The place of supply for goods generally follows where the goods are delivered, so a ship-to address in another state can make the supply inter-state. Confirm the specific rule for your case with your CA.
This guide is general information for small businesses, not legal or tax advice. GST rules, rates and thresholds are changed by notification, so check the current position on the GST portal or with your chartered accountant before acting.