CGST vs SGST vs IGST: The Simple Difference (with Examples)

CGST vs SGST vs IGST: The Simple Difference (with Examples)

Three letters trip up almost every new business owner in India: CGST, SGST, and IGST. They're not extra taxes — they're just how GST gets split. Here's the plain-English version.

The one rule that decides everything

GST is one tax, but who collects it depends on where your customer is:

• Same state as you → the tax splits into CGST (Central) + SGST (State).
• Different state (or export) → it becomes one IGST (Integrated).

That's the whole concept. Same state = split in two. Different state = one combined tax.

What each one means

• CGST (Central GST): the central government's share on an intra-state sale.
• SGST (State GST): the state government's share on that same intra-state sale.
• IGST (Integrated GST): a single tax on inter-state sales, later shared between centre and state.

Examples (using an 18% rate)

Example 1 — same state. A Haryana business sells to a Haryana customer for ₹10,000 at 18%. → CGST 9% = ₹900, SGST 9% = ₹900. Total tax ₹1,800. Invoice total ₹11,800.

Example 2 — different states. The same Haryana business sells to a customer in Karnataka for ₹10,000 at 18%. → IGST 18% = ₹1,800. Total tax ₹1,800. Invoice total ₹11,800.

Notice the total tax is the same — only the split changes. The point is correct reporting, so each government gets its share and your customer can claim input credit.

Why getting it right matters

If you charge CGST+SGST when you should have charged IGST (or vice-versa), your customer may struggle to claim input tax credit, and you may have to issue a corrected invoice. The deciding factor is always the place of supply — usually your customer's state.

How to never get it wrong again

Rather than checking the map on every invoice, let software do it. Ascend reads your state and your customer's state and applies the right treatment automatically — CGST+SGST for same-state, IGST for inter-state — and shows the breakdown clearly on the invoice.

Try Ascend free — automatic GST splits

General information, not tax advice — confirm details with a professional.