CGST, SGST, IGST Explained: Which One Applies to Your Invoice
One of the most common invoicing mistakes under GST is applying the wrong tax split. The rule itself is simple once you understand what determines it: the location of supply, not just where your business is registered.
The Basic Rule
- Intra-state supply (you and your client are in the same state) → charge CGST + SGST, split equally. For example, 18% GST becomes 9% CGST + 9% SGST.
- Inter-state supply (you and your client are in different states, or it's an export) → charge IGST at the full rate instead - no split.
What "State" Means for Services
For services, the relevant location is usually the client's registered place of business (their "place of supply"), not simply where the work was physically performed. If you're a freelancer in Rajasthan invoicing a client registered in Maharashtra, that's inter-state - IGST applies, even if you did the work remotely from home.
Why This Matters on the Invoice
Charging CGST + SGST when IGST was required (or the reverse) can cause the client's input tax credit claim to be rejected, and can create mismatches during your own GST return filing. It's a small line-item detail with real downstream consequences.
Quick Checklist Before You Invoice
- Confirm the client's GSTIN and registered state.
- Compare it to your own registered state.
- Same state → CGST + SGST. Different state → IGST.
Let the Invoice Do the Math
FlowInvoice calculates the GST amount automatically per line item based on the rate you select, so once you know whether it's an intra-state or inter-state transaction, the totals are handled for you.