GST · Glossary

CGST, SGST, and IGST

Three GST components: Central GST, State GST, and Integrated GST.

The GST system splits indirect tax revenue between the Centre and the States under the CGST Act, 2017, the various SGST Acts, and the IGST Act, 2017:

- CGST (Central GST): the Centre's share on intra-state supplies. Half the total GST rate.
- SGST (State GST): the State's share on intra-state supplies. Half the total GST rate.
- IGST (Integrated GST): the full GST rate on inter-state supplies, collected centrally under Section 5 of the IGST Act and apportioned between Centre and destination State.

Which applies depends on the place of supply (Sections 12/13 of the IGST Act): if the supplier and recipient are in the same state, CGST + SGST. If different states, IGST. For a freelance service taxed at 18% GST, intra-state is 9% CGST + 9% SGST; inter-state is 18% IGST.

Worked example

Arjun (KA 29) bills a Bangalore client Rs. 1,00,000: 9% CGST + 9% SGST = Rs. 18,000 total GST. Same Arjun bills a Mumbai client Rs. 1,00,000: 18% IGST = Rs. 18,000 — same total, different split, different ledgers.

Practitioner tip

Don’t split a single inter-state invoice into "half CGST + half IGST" — it’s either pure CGST+SGST (intra) or pure IGST (inter). Mixing creates portal-side mismatches that surface at filing time.

  • GSTIN 15-character alphanumeric GST registration number assigned to every GST-registered taxpayer.
  • SAC (Services Accounting Code) 6-digit code that classifies services for GST reporting (the services equivalent of HSN).

These definitions are educational. Tax laws change annually — verify with a Chartered Accountant before making GST or income-tax decisions.

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