IGST, CGST and SGST in India
Confused by the difference between CGST, SGST and IGST in India? Learn about the different GST rates, rules and requirements. And get some handy insight into how Wise can help, with mid-market rate currency exchange, for a better deal when paying for goods from overseas.
What are CGST, SGST and IGST?
IGST, CGST and SGST are different types of GST tax in India.
What is CGST? CGST full form is Central Goods and Services Tax. This is applied by the central government, when goods or services are sold within the same state.
What is SGST? SGST (full form - State Goods and Services Tax) is also levied on intra-state sales of goods and services. SGST is paid to the state authorities.
Do I pay both CGST and SGST? Both CGST and SGST may be levied on the same transaction. However, the rate of tax is legally bound to remain under 14% for each type of GST. The income is then distributed between the state and central authorities.
What is IGST? Integrated Goods and Services Tax is applied to goods and services moving between states, as well as those being exported or imported into India.
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IGST on import and export
IGST is applied to goods being imported and exported from India. However, in the case of exports, the IGST paid can then be reclaimed once the goods leave the country. This means that ultimately, there is no form of GST to pay when exporting from India.
When importing into India, IGST is paid on the value of the goods or services, plus any applicable customs duties. You’ll need to first calculate the full cost of customs duties and then run the calculation for IGST and GST Compensation Cess. You can find out more about Indian customs duty in this handy guide.
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Difference between CGST, SGST and IGST
Difference between CGST, SGST and IGST
| Tax | Full form | When applicable | Rate |
|---|---|---|---|
SGST/UTGST | State Goods & Services Tax | SGST is levied and collected by the state in which an intra-state transaction takes place. For example, if a supplier in Kerala sells products to a dealer who is also based in Kerala, SGST will apply. | 0%, 0.125%, 1.5%, 2.5%, 6%, 9%, 14% |
CGST | Central Goods & Services Tax | CGST is collected by the central government on intra-state transactions. In the example above, both SGST and CGST would be paid by the dealer in Kerala. | 0%, 0.125%, 1.5%, 2.5%, 6%, 9%, 14% |
IGST | Integrated Goods & Services Tax | IGST applies to inter-state transactions, as well as the import and export of goods and services. IGST revenues are split between the state and central government. | 0%, 0.25%, 3%, 5%, 12%, 18%, 28% |
How are SGST, CGST and IGST levied?
Let’s use an example to illustrate. Imagine this:
Manufacturer A is based in Delhi and sells a shipment worth INR5,000 to Dealer B who is also in Delhi. Dealer B then sells the goods to Trader C in Mumbai for INR 12,000. Finally, Trader C sells the products to the end user - D - who is another Mumbai resident. The goods in question are in the GST slab which means that CGST is 6%, SGST is 6% and IGST is 12%. The first transaction - Manufacturer A to Dealer B - is intra-state, and so attracts CGST and SGST, totalling 12%.
The second sale, between Delhi and Mumbai, is inter-state, so IGST at 12% applies. Finally, the sale to the end user D is once again within state - and means CGST and SGST are levied, to a total of 12%.
Use our simple and easy to use GST calculator to add or remove GST taxes.
FAQ about GST in India
