CGST, SGST and IGST: which one do I charge?
Inside your state the tax splits in two. Across a state border it stays whole.
Last checked 20 September 2026
If your supply and the place of supply are in the same state, the GST rate splits equally into CGST and SGST — 18% becomes 9% + 9%. If they are in different states, the whole rate is charged as one tax, IGST. The buyer pays the same total either way.
The rule in one line
Compare your location with the place of supply. Same state means CGST + SGST. Different states means IGST. That is the entire test, and everything hard about it is in working out the place of supply — see place of supply explained.
| You are in | Place of supply | Charge | On ₹ 10,000 at 18% |
|---|---|---|---|
| Delhi | Delhi | CGST 9% + SGST 9% | ₹ 900 + ₹ 900 |
| Delhi | Rajasthan | IGST 18% | ₹ 1,800 |
| Delhi | Chandigarh (UT) | IGST 18% | ₹ 1,800 |
| Chandigarh (UT) | Chandigarh (UT) | CGST 9% + UTGST 9% | ₹ 900 + ₹ 900 |
What UTGST is
Union Territories without their own legislature charge UTGST in place of SGST. It behaves identically — same rate, same split, different name on the invoice. Union Territories that do have a legislature, such as Delhi and Puducherry, charge SGST like a state.
Why the split matters if the total is the same
It matters to two people, and neither of them is the person paying the bill.
- The governments. CGST goes to the Centre, SGST to the state where the goods are consumed. IGST goes to the Centre first and is settled afterwards. Charging the wrong one sends money to the wrong treasury.
- Your buyer. Credit sits in the pot it was charged into. A buyer who receives an IGST invoice when it should have been CGST + SGST has credit in the wrong place, and cannot use it until the invoice is corrected.
The usual cause is a wrong address, not a wrong rate
Almost every wrongly split invoice comes from a party record with the wrong state on it. Fix the state once, on the party, rather than on each bill.
How credit is set off
Credit cannot be used freely across the three. The order and the restrictions are set by law, and broadly:
| Credit of | Can be set against |
|---|---|
| IGST | IGST first, then CGST and SGST in any order |
| CGST | CGST, then IGST. Never SGST |
| SGST / UTGST | SGST, then IGST. Never CGST |
That last line is why a business selling mostly inter-state while buying mostly locally can end up with SGST credit it struggles to use.
How software should handle this
It should never ask. Your state is on your business profile, the buyer’s state is on their record, and the split follows from the two. In TracEasy the tax line on the billing screen states which way it has gone and why — see create a GST tax invoice.
Can one invoice have both CGST+SGST and IGST?
No. A single invoice has one place of supply, so it is one or the other for every line on it.
What about an export?
Exports are zero-rated. You either export under a bond or LUT without charging tax, or pay IGST and claim a refund. Which route suits you is a question for your accountant.
My buyer is in another state but collecting the goods from my shop. Which applies?
For goods collected over the counter the place of supply is generally where the goods are at the time of delivery, which would make it a local supply — but the position depends on the facts. Confirm it rather than assuming.
Sources
- IGST Act 2017, sections 7–9 (nature of supply) and 10–13 (place of supply)
- CBIC — GST Acts, Rules and notifications (cbic-gst.gov.in)
Free tools for this
How TracEasy handles this
Related reading
What is GST?
One tax on the supply of goods and services, charged at every stage but paid only on the value added.
Place of supply, and why it decides your tax
Not where you are and not where you ship from — where the supply is treated as happening.
GST rates in India after GST 2.0
Four main slabs since 22 September 2025, plus the special rates that survived.