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Difference Between CGST and SGST Explained Simply

Vikash

• 5 min read
Difference Between CGST and SGST

The difference between CGST and SGST is one of the most common things small business owners and shopkeepers in India want to understand. If you're dealing with GST bills or selling goods or services within your state, you’ve likely come across these two terms, CGST and SGST, quite often.

In this article, we’ll break down what CGST and SGST are, the CGST and SGST percentages, and the CGST and SGST differences in the simplest way possible. It will help small and micro-sized businesses like yours manage taxes with ease, and yes, tools like GimBooks can make this even easier!

What Is GST?

Before we dive into the types of GST, let’s understand what GST actually is.

GST (Goods and Services Tax) is a single indirect tax system that replaced many other taxes like VAT, service tax, and excise duty in India. It is applied to the sale of goods and services and is meant to create “One Nation, One Tax”.

But GST is not just one tax. It has different parts:

  • CGST (Central GST).
  • SGST (State GST).
  • IGST (Integrated GST).

Let’s explore CGST and SGST in detail now.

What Is CGST?

CGST or Central Goods and Services Tax is the part of GST that goes to the central government.
  • It is charged when a transaction takes place within a state, also called an intra-state transaction.
  • The revenue collected from CGST goes directly to the central government’s account.

For example, if you sell a product in Maharashtra to a customer also in Maharashtra, CGST will be applied.

What Is SGST?

SGST or State Goods and Services Tax is the portion of GST that goes to the state government.
  • It is also applied to intra-state sales, just like CGST.
  • But in this case, the money goes to the respective state government where the sale happens.

Using the same example above, if the sale happens within Maharashtra, the Maharashtra government gets the SGST.

SGST Is Applicable When?

SGST is applicable when the buyer and seller are located in the same state.

Small businesses need to note that any local sale within their state will have both CGST and SGST applied. For inter-state sales, IGST applies instead.

CGST and SGST Percentage

The total GST rate on most products and services is split equally between CGST and SGST.

For example:

  • If the total GST rate is 18%,
  • Then 9% will go as CGST and 9% as SGST.

Other common GST slabs in India are:

  • 5% = 2.5% CGST + 2.5% SGST.
  • 12% = 6% CGST + 6% SGST.
  • 28% = 14% CGST + 14% SGST.

CGST and SGST Difference: Key Points

Let’s now look at the difference between CGST and SGST in simple points:

Feature

CGST

SGST

Full Form

Central Goods and Services Tax

State Goods and Services Tax

Governing Body

Central Government

State Government

Applied On

Intra-state transactions

Intra-state transactions

Revenue Collected By

Central Government

State Government

Accounting

Separate in your GST return

Separate in your GST return

Share of Tax

50% of the total GST

50% of the total GST

Why Is It Important to Know the CGST and SGST Difference?

Understanding SGST vs CGST helps you:

  • File your GST returns properly.
  • Charge the correct tax on invoices.
  • Avoid penalties from tax authorities.
  • Build better trust with customers.

If you own a small business or are just starting, knowing the basics of CGST and SGST helps keep your finances in check.

Real-Life Example: A Tailor Shop in Gujarat

Let’s say you own a tailor shop in Ahmedabad, Gujarat. A local customer orders a stitched suit worth ₹5,000. The total GST applicable is 18%. Here's how the taxes work:

  • CGST @ 9% = ₹450
  • SGST @ 9% = ₹450
  • Total GST = ₹900

The bill to the customer will be ₹5,900. The ₹450 collected as CGST will go to the Central Government, and ₹450 as SGST will go to the Gujarat State Government.

It is how CGST and SGST work together for intra-state sales.

What Happens in Inter-State Transactions?

If you sell your product from Gujarat to a customer in Rajasthan, then instead of CGST and SGST, IGST (Integrated GST) is applied.

  • IGST goes entirely to the Central Government.
  • It is then shared between states as per the GST Council rules.

So, for local sales: CGST + SGST For out-of-state sales: IGST

Suggested - Major GST Updates for Small Businesses from 1st July 2025

How Can Small Businesses Handle This Easily?

Managing GST, keeping track of CGST and SGST, and filing returns can be confusing, especially if you're handling everything manually.

That’s where GimBooks makes things easier.

How GimBooks Helps You Stay GST Compliant

GimBooks is a cloud-based and mobile-first business management app specially built for small and micro-sized businesses.

Here’s how GimBooks helps with GST and beyond:

GST-Compliant Invoicing

Create GST-ready invoices with correct CGST and SGST splits. No guesswork needed!

Automatic Tax Calculations

Just enter the product and price GimBooks auto-calculates the CGST and SGST percentages.

Easy Bookkeeping

Track all your sales, expenses, and taxes all in one place using just your phone.

Faster GST Filing

Generate GST reports that you can easily upload to the government portal.

Multi-Language Support

GimBooks is designed with regional users in mind, so it works in multiple Indian languages.

Tailored for Indian Businesses

From local shops to service providers, GimBooks supports domain-based bookkeeping, making it ideal for Indian business needs.

CGST and SGST: Summary for Quick Understanding

Let’s wrap up the difference between CGST and SGST in simple bullet points:

  • CGST = Central Government's share.
  • SGST = State Government's share.
  • Both are applied to intra-state sales.
  • Tax is split equally between CGST and SGST.
  • You must show both CGST and SGST on invoices.
  • Use software like GimBooks to automate this process.

Wrapping Up

Understanding the difference between CGST and SGST is essential if you want your small business to run smoothly under GST laws. These two taxes work together whenever you sell goods or services within your state, and knowing how they work can save you from compliance headaches.

But don’t worry, you don’t have to do it all manually. GimBooks makes it easy to generate GST-compliant invoices, track your taxes, and manage your books. Whether you’re a local trader, service provider, or a startup owner, GimBooks is your go-to tool to simplify GST and bookkeeping.

Start using GimBooks today and focus more on growing your business, not on tax paperwork!To know more, explore GimBooks’ informative blog section!

FAQs: Difference Between CGST and SGST

1. What is the difference between CGST and SGST?

CGST is the central government’s share of GST, while SGST is the state government’s share. Both apply to sales within the same state.

2. What are the CGST and SGST percentages?

The GST rate is divided equally between CGST and SGST. For example, if GST is 18%, then CGST is 9% and SGST is 9%.

3. When is SGST applicable?

SGST is applicable when a transaction takes place between a seller and a buyer located in the same state.

4. Can CGST and SGST be charged together?

Yes, for intra-state sales, CGST and SGST are charged together and shown separately in the invoice.

5. How can I manage CGST and SGST in my business easily?

You can use tools like GimBooks to auto-calculate, track, and report CGST and SGST without any hassle.