The three types of GST
- CGST (Central GST): the central government's share on a sale within a state
- SGST (State GST): the state government's share on a sale within the same state (UTGST applies in union territories)
- IGST (Integrated GST): charged on sales between states and on imports and exports
When to charge which
The deciding factor is the place of supply compared with the supplier's location.
- Supplier and place of supply in the same state: charge CGST + SGST, each at half the GST rate
- Supplier and place of supply in different states: charge IGST at the full GST rate
Examples
At an 18% rate on a taxable value of ₹10,000, an intra-state sale carries ₹900 CGST and ₹900 SGST, for a total tax of ₹1,800.
The same sale to another state carries ₹1,800 IGST. The customer pays the same total either way.
For a tax-inclusive price, the tax is worked back out of the price: tax = price − price ÷ (1 + rate).
Why this matters on your invoice
Showing the wrong components can cause trouble when your customer claims credit. Software that compares your state with the customer's state avoids that. Finex Business does this automatically, and GST rates and rules change, so always check the current rate for your goods or services on the official GST portal or with your tax professional.