CGST and SGST under GST in India
27 Dec, 2025
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By Online Legal India
Published On 27 Dec 2025
Category GST
GST (Goods and Services Tax) means a taxation system for the sale of goods and services in India. As per the GST law, it is important to understand the CGST and SGST for business purposes. The CGST means Central Goods and Services Tax. In contrast, SGST signifies State Goods and Services Tax. These two components break the tax revenue between the Central and State governments. This system reduces the “tax on tax” burden. The system helps to make affordable products and smooth business operations. In this blog, you will learn about the CGST and SGST with its meaning, differences, etc.
The GST is a single indirect tax system. The full form of GST is Goods and Services Tax. It has replaced several existing indirect taxes. The taxes can include VAT (Value Added Tax), service tax, and excise duty in India. This applies to the sale of goods and services and makes “One Nation, One Tax”.
Here is an overview of the CGST and SGST:
The CGST is the component of GST (Goods and Services Tax) in India. The CGST stands for Central Goods and Service Tax. The government levied this tax on the transaction of goods and services within the state. It is a kind of tax charged on every intrastate transaction. The CGST replaced all the existing central taxes. It includes central excise duty, service tax and customs duty. It also replaced surcharges and Cess related to the supply of goods and services. The CGST rate is equal to the SGST rate. Both these taxes are charged based on the products. In other words, we can say that GST is levied on the consumption of the product. Under GST, tax is levied based on the place of consumption. The manufacturing state does not have the right to collect GST unless the goods are sold within that state.
SGST is levied only on intra-state transactions, not interstate transactions. The SGST full form is the State Goods and Service Tax. The tax is levied on the state in which the goods are purchased and sold. It will replace the existing taxes of the state.?This contains the VAT (Value Added Tax), sales tax, entry tax and entertainment tax. It can also include the state cess and the surcharge on any kind of transaction for goods and services. The state government has the exclusive authority to design the tax system. They also collect all the revenue generated from the State Goods and Services Tax (SGST).
Here is the table outlines the key difference between SGST and CGST in India:
|
Factors |
CGST |
SGST |
|
Full Form |
The full form of CGST is the Central Goods and Service Tax |
The full form of SGST is the State Goods and Service Tax |
|
Applicability |
This applies to the supply of goods and services within a state. |
This also suits the supply of goods and services within a state. |
|
Collecting Authority |
Central Government |
State Government |
|
Who is the Imposing Authority |
Central Government |
State Government |
|
Meaning |
As per the GST, the Central Goods and Service tax has replaced the existing central taxes. It includes excise duty, service tax, etc. |
According to the? GST, the state goods and service tax has replaces the existing state tax. It contains sales tax, luxury tax, and so on. |
|
Applicability on Transaction |
It applies to Intra-state supply (Within the state) |
This is suitable for Intra-state supply (Within the state) |
|
Registration |
The registration will be applicable if the turnover is more than Rs. 20 lakh (Rs. 10 lakh for northern states) |
The registration is needed if the turnover exceeds to Rs. 20 lakh (Rs. 10 lakh for northern states) |
|
Method of Collection |
The supplier collects the CGST from the buyer. Then, it gets deposited to the Central Government. |
The supplier collects the SGST from the buyer. It goes deposits it to the State Government. |
|
Revenue Flow |
Central Government can share it with States government. |
In SGST, State government cannot share this tax with government. |
|
Share of Tax |
50% |
50% |
|
Composition scheme |
The dealers are eligible to use the benefits of limit is Rs- 1.5 crore (Rs-75 lakh only for some special category states) |
As per the Composition scheme limit is Rs- 1.5 crore (Rs- 75 lakh only for some special category states) |
The calculation of CGST is applying the specific CGST rate to the taxable value of goods or services. It applies in the case of transaction occurs within the same state (intra-state supply). The CGST rate will be the half of the total applicable GST rate.
The calculation of SGST is applies to the taxable value of goods or services. It is applicable if the supply happens within the same state (intra-state transaction). It is also the half of the total applicable GST rate.
Listed below are the entities that must pay CGST and SGST:
Businesses
Businesses that are selling goods and services must pay CGST and SGST.
Suppliers
The suppliers that supplies goods and services need to pay CGST and SGST on their sales.
Distributors
Distributors of goods and services need to pay CGST (Central Goods and Services Tax). They also must pay SGST (State Goods and Services Tax)
Manufacturers
Manufacturers of goods can pay CGST and SGST on their sales.
Importers
Importers of goods are required to pay Integrated Goods and Services Tax (IGST) on the value of the goods imported, along with applicable customs duties. CGST and SGST are not levied on imports.
Conclusion
CGST and SGST are the crucial types of GST taxes. The Indian government levied both these taxes under GST. The Central government collects the tax of CGST. The State government collects the taxes of SGST. Both applies on the value of products and services within a state. Businesses must understand the CGST and SGST for official purposes. They should also follow the GST norms while filing returns.
Q1. What are CGST and SGST?
CGST means the Central Goods and Services Tax. SGST refers to a State Goods and Services Tax. Both these taxes are the components of the GST System in India. Both the taxes levied on the transactions of goods and services within a single state. This means the tax is collected within intra-state transactions.
Q2. What is the Key difference between CGST and SGST?
The key difference between CGST and SGST is that:
CGST (Central Goods and Services Tax) is levied by the central government. In contrast, SGST (State Goods and Services Tax) is levied by the state government. Both these taxes applies to the intra-state transactions.
Q3. Is the rates of CGST and SGST are same?
Yes, the rates of CGST and SGST are the same for particular goods or services under GST in India.
Q4. What is the applicability of the SGST and CGST?
In case the supply of goods or services occurs within the same state, then it applies the CGST and SGST. The supply of goods or services within the same state means an intra-state transaction.
Disclaimer
This article is for informational purposes only and does not constitute legal advice. Online Legal India is a digital platform. If you require legal assistance, we strongly recommend consulting a qualified lawyer or law firm.
By Online Legal India
Published On 27 Dec 2025
Category GST
GST (Goods and Services Tax) means a taxation system for the sale of goods and services in India. As per the GST law, it is important to understand the CGST and SGST for business purposes. The CGST means Central Goods and Services Tax. In contrast, SGST signifies State Goods and Services Tax. These two components break the tax revenue between the Central and State governments. This system reduces the “tax on tax” burden. The system helps to make affordable products and smooth business operations. In this blog, you will learn about the CGST and SGST with its meaning, differences, etc.
The GST is a single indirect tax system. The full form of GST is Goods and Services Tax. It has replaced several existing indirect taxes. The taxes can include VAT (Value Added Tax), service tax, and excise duty in India. This applies to the sale of goods and services and makes “One Nation, One Tax”.
Here is an overview of the CGST and SGST:
The CGST is the component of GST (Goods and Services Tax) in India. The CGST stands for Central Goods and Service Tax. The government levied this tax on the transaction of goods and services within the state. It is a kind of tax charged on every intrastate transaction. The CGST replaced all the existing central taxes. It includes central excise duty, service tax and customs duty. It also replaced surcharges and Cess related to the supply of goods and services. The CGST rate is equal to the SGST rate. Both these taxes are charged based on the products. In other words, we can say that GST is levied on the consumption of the product. Under GST, tax is levied based on the place of consumption. The manufacturing state does not have the right to collect GST unless the goods are sold within that state.
SGST is levied only on intra-state transactions, not interstate transactions. The SGST full form is the State Goods and Service Tax. The tax is levied on the state in which the goods are purchased and sold. It will replace the existing taxes of the state.?This contains the VAT (Value Added Tax), sales tax, entry tax and entertainment tax. It can also include the state cess and the surcharge on any kind of transaction for goods and services. The state government has the exclusive authority to design the tax system. They also collect all the revenue generated from the State Goods and Services Tax (SGST).
Here is the table outlines the key difference between SGST and CGST in India:
| Factor | CGST (Central Goods and Services Tax) | SGST (State Goods and Services Tax) |
|---|---|---|
| Full Form | Central Goods and Services Tax | State Goods and Services Tax |
| Applicability | Intra-state supply of goods and services | Intra-state supply of goods and services |
| Collecting Authority | Central Government | State Government |
| Imposing Authority | Central Government | State Government |
| Meaning | Replaced central indirect taxes such as excise duty and service tax | Replaced state indirect taxes such as VAT, luxury tax, etc. |
| Applicable Transactions | Intra-state transactions | Intra-state transactions |
| Registration Threshold | Turnover above ?20 lakh (?10 lakh for special category states) | Turnover above ?20 lakh (?10 lakh for special category states) |
| Method of Collection | Collected by supplier and deposited with Central Government | Collected by supplier and deposited with State Government |
| Revenue Sharing | Shareable with State Governments | Not shareable with Central Government |
| Share of Tax | 50% of total GST | 50% of total GST |
| Composition Scheme Limit | ?1.5 crore (?75 lakh for special category states) | ?1.5 crore (?75 lakh for special category states) |
The calculation of CGST is applying the specific CGST rate to the taxable value of goods or services. It applies in the case of transaction occurs within the same state (intra-state supply). The CGST rate will be the half of the total applicable GST rate.
The calculation of SGST is applies to the taxable value of goods or services. It is applicable if the supply happens within the same state (intra-state transaction). It is also the half of the total applicable GST rate.
Listed below are the entities that must pay CGST and SGST:
Businesses
Businesses that are selling goods and services must pay CGST and SGST.
Suppliers
The suppliers that supplies goods and services need to pay CGST and SGST on their sales.
Distributors
Distributors of goods and services need to pay CGST (Central Goods and Services Tax). They also must pay SGST (State Goods and Services Tax)
Manufacturers
Manufacturers of goods can pay CGST and SGST on their sales.
Importers
Importers of goods are required to pay Integrated Goods and Services Tax (IGST) on the value of the goods imported, along with applicable customs duties. CGST and SGST are not levied on imports.
Conclusion
CGST and SGST are the crucial types of GST taxes. The Indian government levied both these taxes under GST. The Central government collects the tax of CGST. The State government collects the taxes of SGST. Both applies on the value of products and services within a state. Businesses must understand the CGST and SGST for official purposes. They should also follow the GST norms while filing returns.
Q1. What are CGST and SGST?
CGST means the Central Goods and Services Tax. SGST refers to a State Goods and Services Tax. Both these taxes are the components of the GST System in India. Both the taxes levied on the transactions of goods and services within a single state. This means the tax is collected within intra-state transactions.
Q2. What is the Key difference between CGST and SGST?
The key difference between CGST and SGST is that:
CGST (Central Goods and Services Tax) is levied by the central government. In contrast, SGST (State Goods and Services Tax) is levied by the state government. Both these taxes applies to the intra-state transactions.
Q3. Is the rates of CGST and SGST are same?
Yes, the rates of CGST and SGST are the same for particular goods or services under GST in India.
Q4. What is the applicability of the SGST and CGST?
In case the supply of goods or services occurs within the same state, then it applies the CGST and SGST. The supply of goods or services within the same state means an intra-state transaction.
Disclaimer
This article is for informational purposes only and does not constitute legal advice. Online Legal India is a digital platform. If you require legal assistance, we strongly recommend consulting a qualified lawyer or law firm.
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