Every GST sale is charged under one of two arrangements, and which one depends on a single question: is the place of supply in the same state as you?
Same state: CGST + SGST
When you and the place of supply are in the same state, the sale is intra-state. The rate is split in two equal halves:
- CGST goes to the Centre,
- SGST goes to the state (or UTGST in a Union Territory without its own legislature).
An item taxed at 18% is charged 9% CGST + 9% SGST. At 12%, it is 6% + 6%.
Different state: IGST
When the place of supply is in another state, the sale is inter-state, and the whole rate is charged as IGST. The same 18% item is charged 18% IGST.
Exports and supplies to SEZ units are treated as inter-state too.
Working it out from GSTINs
The first two digits of a GSTIN are the state code — 08 is Rajasthan, 24 is Gujarat, 27 is Maharashtra. For goods, the place of supply is usually where the goods are delivered. So a quick check:
| You (seller) | Buyer delivered in | Charge |
|---|---|---|
| 08 (Rajasthan) | Rajasthan | CGST + SGST |
| 08 (Rajasthan) | Gujarat | IGST |
A worked example
A Jaipur shop sells 4 PVC pipes at ₹180 (18%) and 6 LED bulbs at ₹99 (12%).
- To a buyer in Jaipur: pipes ₹720 + ₹64.80 CGST + ₹64.80 SGST; bulbs ₹594 + ₹35.64 CGST + ₹35.64 SGST.
- To a buyer in Ahmedabad: pipes ₹720 + ₹129.60 IGST; bulbs ₹594 + ₹71.28 IGST.
The total tax is the same. What changes is which government receives it — and which credit your buyer can claim.
Why getting it wrong matters
Charging CGST + SGST on an inter-state sale (or the reverse) means the tax was paid to the wrong account. Your buyer may not get the credit until the invoice is corrected, and correcting it means a credit note and a new invoice.
In Billyng
You don’t choose. Billyng compares your GSTIN’s state with the buyer’s and charges CGST + SGST or IGST accordingly, line by line, at each product’s own rate. A buyer without a GSTIN is treated as being in your state. You can try it on the live bill on our home page.