Difference Between CGST, SGST & IGST (Explained Simply)

Many people new to GST often get confused between CGST, SGST, and IGST. Understanding the difference between these three is essential for creating correct GST invoices in India.

In this article, we explain the difference between CGST, SGST & IGST with simple definitions, comparison tables, and real examples.

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What is CGST?

CGST (Central Goods and Services Tax) is the tax collected by the Central Government on intra-state supplies of goods or services.

CGST is applicable when the seller and the buyer are located in the same state.

What is SGST?

SGST (State Goods and Services Tax) is the tax collected by the State Government on intra-state supplies.

Like CGST, SGST is also applied when the seller and buyer are in the same state.

What is IGST?

IGST (Integrated Goods and Services Tax) is collected by the Central Government on inter-state supplies of goods or services.

IGST is applicable when the seller and buyer are in different states.

Difference Between CGST, SGST & IGST

Basis CGST SGST IGST
Full Form Central Goods and Services Tax State Goods and Services Tax Integrated Goods and Services Tax
Collected By Central Government State Government Central Government
Applicable On Intra-state supply Intra-state supply Inter-state supply
Seller & Buyer Location Same state Same state Different states
Tax Sharing Centre share State share Centre distributes to states

CGST, SGST & IGST Example

Example 1 (Same State):
Seller: Delhi
Buyer: Delhi
GST Rate: 18%
Tax Applied: 9% CGST + 9% SGST
Example 2 (Different State):
Seller: Delhi
Buyer: Maharashtra
GST Rate: 18%
Tax Applied: 18% IGST

How CGST, SGST & IGST Appear on GST Invoice

In a GST invoice:

Why Understanding CGST, SGST & IGST is Important

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Conclusion

Understanding the difference between CGST, SGST & IGST is essential for every GST-registered business in India.

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