The abbreviations look complicated, but the basic idea is simple: the tax shown on an invoice changes according to whether a supply is within one state or crosses state boundaries.
The three GST components
Central Goods and Services Tax, collected by the Central Government on an intra-state supply.
State or Union Territory GST, charged alongside CGST on an intra-state supply.
Integrated Goods and Services Tax, generally charged on an inter-state supply and collected by the Centre.
Within the same state: CGST + SGST
When the supplier location and place of supply are in the same state, the supply is generally intra-state. The GST rate is split equally between CGST and SGST. In a Union Territory without a legislature, UTGST may apply instead of SGST.
Across state boundaries: IGST
When the supplier location and place of supply are in different states or Union Territories, the supply is generally inter-state. The full GST amount appears as IGST.
Why place of supply matters
GST is destination-based. The place-of-supply rules determine which state receives the tax and can vary by transaction type. Services involving property, events, transport, telecom, exports or online delivery can have special rules. When the answer is not obvious, confirm it before issuing the invoice.
A quick decision path
- Identify the GST-registered location making the supply.
- Determine the place of supply under the relevant GST rule.
- If both are in the same state, usually apply CGST plus SGST/UTGST.
- If they are in different states, usually apply IGST.
- Show the place of supply and state on an inter-state invoice.
Official references
Once you have confirmed the applicable rate and place of supply, use the GST calculator to check the split or work backwards from a tax-inclusive amount.
See the CBIC GST FAQs, the CBIC GST overview and Circular 90/09/2019-GST on place-of-supply details in inter-state invoices.