CGST, SGST or IGST? Which Tax to Charge on an Invoice
Same state means CGST + SGST, different state means IGST. How place of supply decides it, with examples, and the cases that trip shopkeepers up.
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Try Inventory Invoice freeEvery GST invoice has the same question hiding in it: do I charge CGST and SGST, or IGST? Get it wrong and the bill is wrong, even if the total looks fine.
The rule is simpler than it sounds.
The one-line rule
Compare your state with the place of supply.
- Same state → CGST + SGST. The rate is split in half: an 18% item is 9% CGST + 9% SGST.
- Different state → IGST. The whole rate is charged as one tax: 18% IGST.
CGST goes to the central government, SGST to the state. IGST is collected centrally and shared out later. For you as the seller, the only job is picking the right set of lines.
Examples
A shop in Jaipur sells to a customer in Jaipur. Same state, so ₹5,000 of goods at 12% is ₹300 CGST + ₹300 SGST, a total of ₹5,600.
The same shop sells to a customer in Delhi. Different state, so the same goods carry ₹600 IGST. The total is still ₹5,600.
The customer pays the same amount either way. What differs is which tax lines print on the bill, and that is exactly what their accountant checks.
Place of supply is not always the billing address
For goods, the place of supply is generally where they are delivered, not where the customer's office happens to be registered. A Mumbai company that asks you to ship to its Bengaluru warehouse is usually an inter-state sale, so IGST. When the bill-to and ship-to differ, this is the case that most often gets wrongly taxed.
Two cases that catch people out
- Union territories. Some are taxed with UTGST in place of SGST. If you sell into one, check how it applies to you.
- Selling to an unregistered customer in another state. Special rules can apply depending on the value and the type of sale, so don't assume it follows the usual pattern.
Quick answers
Can one invoice have both CGST/SGST and IGST? No. A single invoice uses one set, based on its place of supply.
Does the total change? No. Only the tax lines change; the amount the customer pays doesn't.
Where do I find my own state? It comes from the first two digits of your GSTIN.
Always confirm edge cases for your business with your CA.
Stop choosing by hand
Choosing the split on every invoice is what makes manual billing slow and error-prone. In ReplyDost Invoice you set your state once; for each sale it compares it with the customer's place of supply and fills in CGST + SGST or IGST for you. See the full list of invoice fields in How to make a GST invoice.
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