GST Basics

CGST vs SGST vs IGST — Which Applies to You?

June 2026 · 6 min read

When you create a GST invoice in India, you need to decide whether to charge CGST + SGST or IGST. The answer depends on one thing: whether your client is in the same state as you or a different state. This guide explains the difference in plain English and tells you exactly what to put on your invoice.

The short answer

Client location	Tax to charge	Example (18% GST)
Same state as you	CGST + SGST	9% + 9% = 18%
Different state	IGST	18% IGST
Outside India (export)	0% (LUT required)	₹0 GST

What is CGST?

CGST (Central Goods and Services Tax) is the portion of GST collected by the Central Government. It applies on intra-state transactions — when you and your client are both in the same state. The rate is always half of the total GST rate.

Example: You’re a freelancer in Maharashtra billing a client in Maharashtra at 18% GST. You charge 9% CGST (goes to Central Government) + 9% SGST (goes to Maharashtra Government).

What is SGST?

SGST (State Goods and Services Tax) is the state government’s share of GST. It always applies alongside CGST for same-state transactions. The SGST rate equals the CGST rate.

Each state has its own SGST Act (Maharashtra GST Act, Karnataka GST Act, etc.), but the rates are uniform across India.

What is IGST?

IGST (Integrated Goods and Services Tax) applies on inter-state transactions — when you and your client are in different states. It’s collected entirely by the Central Government and then shared with the destination state.

The IGST rate equals the total GST rate (CGST + SGST combined). So 18% GST becomes 18% IGST — not 9+9.

Real-world examples for freelancers

Designer in Bengaluru (Karnataka) → Client in Bengaluru (Karnataka)

CGST 9% + SGST (Karnataka) 9% = 18%

Same state → intra-state → CGST + SGST

Developer in Mumbai (Maharashtra) → Client in Delhi

IGST 18%

Different states → inter-state → IGST

Writer in Chennai (Tamil Nadu) → US-based company

0% GST (export of services)

Outside India → zero-rated → need LUT from GST portal

Consultant in Hyderabad (Telangana) → Client in Hyderabad

CGST 9% + SGST (Telangana) 9%

Same city, same state → CGST + SGST

How to determine ”place of supply” for services

For services, the place of supply is generally the location of the service recipient (your client). If your client is a registered business, use their GSTIN state. If they’re an individual (unregistered), use the state where the service is actually performed or consumed.

Special cases: for online services to individuals, the place of supply is the recipient’s location. For services relating to immovable property, it’s where the property is located.

Input Tax Credit (ITC) implications

Your client can claim Input Tax Credit on the GST you charge — but only on the correct type. If you charge CGST + SGST but it should have been IGST, your client cannot claim ITC correctly. This is why getting the split right matters beyond just compliance.

Exporting services to foreign clients

If you invoice foreign clients (US, UK, Europe, etc.) for services, your supply is an export of services and is zero-rated. You don’t charge GST. But you must:

File a Letter of Undertaking (LUT) on the GST portal each financial year
Receive payment in foreign currency through banking channels
Mention ”Export of Services under LUT — IGST NIL” on your invoice

QuikBil handles all of this automatically

When you create an invoice on QuikBil, you select your client’s state. QuikBil automatically applies CGST + SGST for same-state clients and IGST for inter-state clients — no manual calculation needed.

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