CGST, SGST and IGST: Understanding the Calculation

Decide the nature of the supply before calculating

CGST is central tax, SGST is state tax and IGST is integrated tax. For an ordinary taxable intra-State supply, the calculation commonly has CGST and SGST components. For an ordinary taxable inter-State supply, it has IGST instead. They are not three taxes to add together on the same example.

The general comparison is between the location of the supplier and the legally determined place of supply. It is not simply a comparison of the seller's and buyer's mailing addresses. Sections 7 and 8 of the IGST Act define inter-State and intra-State supply, subject to the applicable place-of-supply provisions.

One base, two illustrative tax presentations

Assume a taxable base of ₹5,000, an applicable combined rate of 18%, an ordinary domestic taxable supply and no exemption or special treatment. The 18% rate is an example, not a recommendation for any goods or services.

For a supplier located in Maharashtra, an ordinary supply whose legally determined place of supply is also Maharashtra fits the first example, subject to exceptions. If the place of supply is Karnataka, it fits the second under the stated assumptions. Changing the tax presentation does not double the combined tax.

In the GST Calculator, enter 5000, select 18%, choose Add GST and compare the intra-State and inter-State results. Enter 5900 with Remove GST to recover base ₹5,000 and tax ₹900. The inclusive/exclusive guide explains the back-calculation.

Why place of supply needs more than an address

Goods involving movement, bill-to/ship-to arrangements, services related to immovable property and cross-border services have specific rules. A customer paying from another state does not by itself settle which rule applies. The calculator has no location or transaction-classification engine; its tax-type selector is your assumption, not a finding of law.

CBIC's sectoral FAQs illustrate how particular transactions require their own analysis. For an actual invoice, identify the relevant statutory provision and any applicable amendment or notification instead of extending one simplified example to every supply.

Important exceptions and boundaries

• SEZ supplies: supplies to or by an SEZ developer or unit are treated as inter-State under section 7(5)(b), even when located in the same state. Zero-rating is a separate question: section 16 includes supplies for authorised operations to an SEZ developer or unit, subject to the legal conditions. Do not treat every SEZ-related transaction as automatically tax-free.
• Exports and imports: exports can be zero-rated subject to the statutory conditions; imports involve separate rules. The ordinary domestic example is not an import-duty, refund or export-eligibility calculation.
• Union territories: where UTGST applies, the corresponding intra-territory tax is CGST plus UTGST rather than SGST. The current tool's intra-State result labels the second component SGST; it does not provide a separate UTGST invoice mode.
• Special treatment: exemptions, reverse charge, composition arrangements and cess can require different handling. This calculator does not decide who must pay or which document must be issued.

Reconcile the numbers without inferring tax credit

Check that base plus tax equals the inclusive amount and, for the ordinary intra-State split, that the two components add to the combined tax. Do not add IGST on top of CGST and SGST. A numerically correct split does not validate registration, classification, invoice particulars or entitlement to input tax credit.

The calculation also does not determine how tax is settled between governments. Its purpose is to show invoice arithmetic from your selected assumptions.

References and review date

Reviewed 18 October 2026 against the official IGST Act text, especially sections 7, 8, 10–13 and 16, and CBIC guidance linked above. Consult the CBIC Tax Information Portal for current provisions and notifications. This educational comparison is not a substitute for resolving the facts of an actual supply.

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