Glossary
What is CGST?
The central half of the tax on every sale you make inside your own state.
Updated
In short
CGST is the central government's share of GST on a supply within one state, charged with SGST at equal rates. SimpleERP applies CGST and SGST automatically when the customer's place of supply is in your branch's state.
CGST, Central Goods and Services Tax, is the central government's share of GST on a supply made within one state. It is charged alongside SGST, or UTGST in some union territories, each at half the total rate, so an 18% supply carries CGST 9% and SGST 9%. On a supply between two states, IGST is charged instead of CGST and SGST.
CGST: a worked example
Lakshmi Steel Furnitures in Coimbatore sells 2 steel racks at ₹4,990 each to Ravi Stores, also in Coimbatore, on invoice INV-2026-27-0213. Assuming the racks carry 18% GST, the taxable value of ₹9,980 attracts CGST of ₹898.20 and SGST of ₹898.20, and the total rounds to ₹11,776. Rates change, so confirm the rate for your goods with your CA or the GST portal before you rely on it.
| Line | Amount |
|---|---|
| Taxable value | ₹9,980.00 |
| CGST 9% | ₹898.20 |
| SGST 9% | ₹898.20 |
| Round off | −₹0.40 |
| Invoice total | ₹11,776.00 |
Can CGST credit be used to pay SGST?
No. Input CGST is set off first against output CGST and then against IGST. It can never pay SGST or UTGST, and SGST credit can never pay CGST. That is why a business with lopsided credit can still owe cash on one head while holding credit on the other.
FAQ
Questions, answered
Is CGST always exactly half of the GST rate?
On a supply within one state, yes. The total rate is split equally between CGST and SGST, or CGST and UTGST in a union territory without a legislature. An 18% rate becomes 9% plus 9%, and a 5% rate becomes 2.5% plus 2.5%.
Who keeps the CGST I collect from customers?
The central government. You collect it on the invoice, hold it as a liability, and pay the net amount after input tax credit when you file GSTR-3B. The SGST half goes to your state government through the same return.
Do I charge CGST when my customer is in another state?
CGST is not charged when the customer is in another state. When the place of supply is in a different state from your registration, the sale is inter-state and you charge IGST at the full rate instead of CGST and SGST. The total tax is the same; only the split and the government that collects it change.
Can I claim the CGST I paid on my purchases?
CGST paid on purchases can be claimed as input tax credit if you hold a valid tax invoice, have received the goods or services, the supplier has reported the invoice so it shows in your GSTR-2B, and the purchase is not a blocked credit. Your CA can confirm edge cases.
Related
Keep reading
SGST and UTGST
The state's half of GST on a sale within one state, or UTGST in some union territories.
Read moreIGST
GST at the full rate on supplies between states and on imports, collected by the centre.
Read morePlace of supply
How place of supply under GST decides CGST and SGST or IGST, with the rules for goods and services and six worked invoices.
Read more
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