The quick answer
CGST and SGST or UTGST commonly apply together to the relevant intrastate supply; IGST applies to the relevant interstate supply. The actual treatment depends on the legal location-of-supplier and place-of-supply analysis, including applicable exceptions.
A buyer’s phone location or postal address alone is not always enough. Delivery arrangements, services, exports and special supplies can require different analysis. Determine the treatment first, then calculate and record the components.
Before you begin
- Supplier registration and location facts.
- Recipient, delivery and legally relevant place-of-supply information.
- Item or service classification, taxable value and verified rate.
See how the pieces connect
Facts
Collect supplier, recipient and supply information.
Treatment
Determine the applicable place-of-supply rules.
Components
Apply the correct tax heads.
Records
Reconcile each component separately.
Work through the steps
Identify the supplying registration
Use the GSTIN and location associated with the actual supply. A business operating in several states cannot select a convenient registration simply because the customer wants a particular tax split.
Determine the place of supply
Use the relevant rules for goods or services and the transaction’s facts. Bill-to/ship-to arrangements and special supply types require care. Do not use a phone number’s state as a substitute.
Choose the applicable components
For the relevant intrastate treatment, the tax is split into CGST and SGST or UTGST as applicable. For the relevant interstate treatment, use IGST. Special and zero-rated supplies need their own review.
Calculate from taxable value
Use the actual verified rate on the applicable taxable value. A hypothetical 18% example can illustrate a 9% plus 9% split or 18% IGST, but it cannot establish any product’s rate.
Check the document particulars
Verify GSTINs, place-of-supply information where required, tax labels and totals. An invoice with correct arithmetic but incorrect tax heads can still cause reconciliation and credit problems.
Keep component-level records
Track CGST, SGST/UTGST, IGST and any cess separately in sales and purchase preparation. Reconcile each component rather than combining them into one GST figure that hides errors.
A worked example
Same taxable value, different applicable tax heads
Assume valid treatment, ₹1,000 taxable value and a hypothetical 18% rate, with no other adjustments.
| Supply treatment | CGST | SGST | IGST | Total |
|---|---|---|---|---|
| Illustrative intrastate | ₹90 | ₹90 | ₹0 | ₹1,180 |
| Illustrative interstate | ₹0 | ₹0 | ₹180 | ₹1,180 |
| Incorrect mixed heads | ₹90 | ₹90 | ₹180 | ₹1,360 |
The first two totals are equal in this simple example, but the component records differ. Applying all heads together double-counts tax.
Common mistakes to avoid
- Choosing the tax head from a phone number or a guess about the buyer’s state.
- Applying CGST/SGST and IGST to the same normal line.
- Ignoring bill-to/ship-to or special place-of-supply rules.
- Checking only the grand total rather than each component.
Questions you might have
Is an out-of-state customer address always enough for IGST?
No. Determine the legally applicable supply treatment from the actual transaction and place-of-supply rules.
Can software resolve every special supply case?
Do not assume so. Enter accurate facts, review supported behaviour and get unusual transactions checked before issuing the invoice.
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Sources and further reading
Official rules and portal screens can change. Use the linked authority for the current requirements; the figures in our worked examples are illustrative.