CGST vs SGST vs IGST: Which GST to Charge (with Simple Examples)

If you've ever stared at an invoice wondering whether to charge IGST or split it into CGST + SGST, you're not alone — it's the single most common GST question small businesses ask. The rule is actually simple once you see it, so let's clear it up for good.

The one question that decides everything

Ask: is the supply within the same state, or between two states?

• Same state (your state = the customer's state) → this is an intra-state supply → charge CGST + SGST.
• Different states → this is an inter-state supply → charge IGST.

That's it. The "place of supply" — usually where your customer is — is what decides it.

What each one actually is

• CGST — Central GST, collected by the central government.
• SGST — State GST, collected by your state government.
• IGST — Integrated GST, collected by the centre and later shared with the destination state.

For an intra-state sale, the total GST rate is split equally between CGST and SGST. For an inter-state sale, the whole rate goes to IGST. The total tax the customer pays is the same either way — only the split (and who collects it) changes.

Worked example: intra-state (CGST + SGST)

You're in Maharashtra and sell to a customer in Maharashtra. Taxable value ₹10,000 at 18% GST:

• CGST 9% = ₹900
• SGST 9% = ₹900
• Total GST = ₹1,800, invoice total ₹11,800

Worked example: inter-state (IGST)

Same ₹10,000 at 18%, but now your customer is in Tamil Nadu:

• IGST 18% = ₹1,800
• Total GST = ₹1,800, invoice total ₹11,800

Notice the customer pays ₹1,800 in both cases. What changed is the classification — and getting it wrong on the invoice causes real headaches at filing time.

Common mix-ups

• "I shipped it to another state, so it's IGST, right?" Not always — the place of supply rules for services can differ from where goods physically go. For most straightforward sales, though, the customer's state is your answer.
• Exports and SEZ supplies are treated as inter-state (IGST), often at 0% under specific conditions — check your case.
• Your GSTIN's first two digits are your state code. If your customer's GSTIN starts with the same two digits as yours, it's intra-state.

Let the invoice do it for you

The safest way to never get the split wrong is to let software read the two states and apply CGST+SGST or IGST automatically. That's exactly what happens when you make an invoice with the free generator — pick intra- or inter-state and it fills in the right split — or when you create a free Simple Billing account, which detects it from your and your customer's state and does it for you on every invoice.

Want the full walkthrough? See how to make a GST invoice online.