CGST vs SGST vs IGST: Which Tax Applies to Your Invoice? (Simple Guide)

Made an invoice and stared at three tax options wondering which one to pick?
You're not alone. This is one of the most googled GST doubts in India — and getting it wrong can mean a rejected invoice or a compliance notice.

Let's fix that in 3 minutes.

The Simple Rule You Need to Remember

Same state → CGST + SGST
Different state → IGST
That's it. Everything else is just detail.

What Do CGST, SGST, and IGST Actually Mean?

When you sell within your state, the tax revenue is split between Centre and State — hence two separate taxes (CGST + SGST). When goods or services cross state lines, IGST is collected centrally and then distributed.

Intra-State Sale (Seller and Buyer in Same State)

Apply: CGST + SGST

Example: A Delhi-based designer sells a logo to a Delhi startup for ₹10,000 at 18% GST.

Both taxes appear as separate line items on the invoice. The rates are always equal — CGST = SGST.

Inter-State Sale (Seller and Buyer in Different States)

Apply: IGST only

Example: The same Delhi designer sells to a Mumbai client for ₹10,000 at 18%.

Notice the total tax is identical — only the structure changes. IGST is a single line item on the invoice.

What About Export Sales?

Exports are treated as zero-rated supply under GST. You either:

• Charge 0% IGST (with bond/LUT), or
• Charge IGST and claim a refund later

Never charge CGST + SGST on an export invoice.

Common Mistakes to Avoid

❌ Charging IGST on an intra-state invoice (or vice versa) — this creates a mismatch in GSTR filings and your buyer can't claim ITC properly.

❌ Splitting IGST into CGST + SGST on the invoice — these are separate tax heads and cannot be mixed.

❌ Using the wrong GSTIN state code — always match the first 2 digits of your GSTIN with your billing state.

How to Know If a Sale Is Intra-State or Inter-State?

Check the place of supply, not just the shipping address.

• For goods: usually where goods are delivered
• For services: usually where the buyer is registered

When in doubt, the billing address of the buyer (as per their GSTIN) is your safest reference.

Frequently Asked Questions

Q: Can I charge both IGST and CGST+SGST on the same invoice?
No. It's always one or the other depending on the place of supply.

Q: What if my buyer doesn't have a GSTIN?
Use their state of residence to determine intra or inter-state. Charge accordingly but the invoice is treated as B2C (unregistered buyer).

Q: The GST rate is 18% in both cases — why does the type matter?
Because ITC (Input Tax Credit) follows the tax type. A buyer can't offset IGST paid against SGST liability freely without reconciliation. Wrong tax type = ITC headache for your client.

Q: What happens if I apply the wrong tax?
You'll need to issue a credit note and a revised invoice. It also affects your GSTR-1 filing and your buyer's GSTR-2B. Fix it before filing.

Quick Decision Chart

Is the buyer in the same state as you?
        |
       YES → Charge CGST + SGST (each at half the GST rate)
        |
        NO → Charge IGST (full GST rate)
        |
   Is it an export?
        |
       YES → Zero-rated / IGST with refund

Want your invoices to auto-pick the right tax based on buyer state? Invoizzy does this automatically — enter the GSTIN and the correct tax type is applied for you.