India's Goods and Services Tax (GST), implemented on 1 July 2017, replaced a tangle of indirect taxes with a single framework. But GST is not one tax; it comes in four types, and which one applies depends on where the buyer and seller sit relative to state and Union Territory borders.
This guide explains the four types of GST, CGST, SGST, IGST, and UTGST, when each applies, and how the tax splits, with worked examples throughout.
This guide explains the four types of GST, CGST, SGST, IGST, and UTGST, when each applies, and how the tax splits, with worked examples throughout.
TL;DR
- India has four types of GST: CGST, SGST, IGST, and UTGST, with the applicable type determined by where the buyer and seller are located.
- CGST + SGST apply to transactions within the same state, while CGST + UTGST apply to eligible transactions within a Union Territory.
- IGST applies to interstate transactions and imports, with tax collected centrally and apportioned under the GST framework.
What are the four types of GST in India?
India has four types of GST. CGST (Central GST) and SGST (State GST) both apply to intrastate transactions (a sale within the same state), split between the central and state governments. IGST (Integrated GST) applies to interstate transactions and imports, collected centrally and then shared with the consuming state. UTGST (Union Territory GST) replaces SGST for transactions within a Union Territory. In short: within a state you pay CGST + SGST, across states or on imports you pay IGST, and within a UT you pay CGST + UTGST.
Each type is explained below:
1. What is CGST?
CGST (Central Goods and Services Tax) is levied by the central government on intrastate transactions, sales within the same state. On such a sale, CGST is charged alongside SGST.
- Levied by: Central Government
- Applies to: Intrastate transactions only
- Example: On goods sold for ₹1,000 at a CGST rate of 9%, CGST = ₹1,000 × 9% = ₹90. If SGST is also 9%, the total GST is ₹180.
2. What is SGST?
SGST (State Goods and Services Tax) is levied by the state government on intrastate sales, alongside CGST, so both the central and state governments receive their share.
- Levied by: State Government
- Applies to: Intrastate transactions only
- Example: On goods sold for ₹1,000 at an SGST rate of 9%, SGST = ₹1,000 × 9% = ₹90. Combined with 9% CGST, the buyer pays ₹180 in total GST.
3. What is IGST?
IGST (Integrated Goods and Services Tax) applies to interstate transactions (between two different states) and to international trade, including imports. It ensures goods move across state borders without tax being duplicated.
- Levied by: Central Government
- Applies to: Interstate and international supplies
- Governing act: IGST Act, 2017
- Example: On goods sold for ₹1,000 at an IGST rate of 18%, IGST = ₹1,000 × 18% = ₹180.
IGST is collected by the central government and then shared with the state where the goods are ultimately consumed.
4. What is UTGST?
UTGST (Union Territory Goods and Services Tax) is the equivalent of SGST for Union Territories, which have no state government. It is charged alongside CGST, at the same rate, so tax administration in UTs mirrors that in states.
- Levied by: Union Territory administration
- Applies to: Transactions within a Union Territory
- Example: On goods sold for ₹1,000 at a UTGST rate of 9%, UTGST = ₹1,000 × 9% = ₹90, charged alongside 9% CGST.
How do the GST types compare?
Though all four sit under the GST framework, they serve different purposes. The table below compares them.
| Aspect | CGST | SGST | IGST | UTGST |
|---|---|---|---|---|
| Levied by | Central Government | State Government | Central Government | Union Territory administration |
| Applies to | Intrastate transactions | Intrastate transactions | Interstate and international | Union Territory transactions |
| Revenue goes to | Central government | State government | Shared between states | UT administration |
| Payment trigger | Sale within same state | Sale within same state | Cross-border transactions | Transactions within UTs |
| Input credit | Yes | Yes | Yes (across borders) | Yes |
A quick example of each in context: a bakery in Delhi selling cakes within Delhi charges CGST 9% + SGST 9% (18% total), with half going to the central government and half to Delhi. A furniture maker in Gujarat selling a table to a customer in Tamil Nadu charges IGST 18% on that interstate sale. A clothing retailer in Lakshadweep selling locally charges CGST 9% + UTGST 9%.
How do the GST types apply in practice?
Worked examples make the split clearer.
Intrastate transaction (CGST + SGST). A business in Maharashtra sells goods worth ₹1,00,000 to a customer within Maharashtra at an 18% GST rate:
| Item | Amount |
|---|---|
| Total sale value | ₹1,00,000 |
| CGST (9%) | ₹9,000 |
| SGST (9%) | ₹9,000 |
| Total tax collected | ₹18,000 |
Here ₹9,000 goes to the central government and ₹9,000 to Maharashtra.
Interstate transaction (IGST). A company in Maharashtra sells goods worth ₹2,00,000 to a customer in Karnataka at 18%. IGST applies instead of CGST + SGST because the goods cross state lines:
| Item | Amount |
|---|---|
| Total sale value | ₹2,00,000 |
| IGST (18%) | ₹36,000 |
| Total tax collected | ₹36,000 |
The ₹36,000 is collected as IGST, which the central government later shares between Maharashtra and Karnataka.
Comparison across transaction types:
| Transaction type | Applicable GST | Example | Tax |
|---|---|---|---|
| Intrastate sale (goods) | CGST + SGST | Electronics sold within Uttar Pradesh, ₹50,000 | ₹4,500 + ₹4,500 |
| Intrastate sale (services) | CGST + SGST | Consultancy in West Bengal, ₹1,00,000 | ₹9,000 + ₹9,000 |
| Interstate sale | IGST | Car dealer in Rajasthan sells to Kerala, ₹5,00,000 | ₹90,000 |
| Sale in Union Territory | CGST + UTGST | Vendor in Andaman and Nicobar, ₹30,000 | ₹2,700 + ₹2,700 |
| Import of goods | IGST | Machinery imported from Germany, ₹10,00,000 | ₹1,80,000 |
Rates shown (9%, 18%) are illustrative; actual GST rates vary by product and service under the applicable GST slab.
Conclusion
India's GST system is designed to simplify taxation and make compliance and revenue management easier. Knowing which type applies, CGST + SGST within a state, IGST across states or on imports, and CGST + UTGST in a Union Territory, is essential for accurate tax planning and smooth operations.
If you handle international transactions, IGST on imports is only one part of the picture. As an RBI-authorised cross-border payments platform, PayGlocal helps Indian businesses collect and manage international payments across currencies, so your cross-border operations run smoothly alongside your tax compliance.
