How GST works on a bill: CGST, SGST and IGST explained
By the FreeAllTool team · Updated October 28, 2026
When you look at a restaurant bill or a business invoice in India, you will often see GST split into two lines, CGST and SGST. On other invoices you will see a single line called IGST. The total tax is the same idea in both cases; what changes is which government receives it.
What GST is
Goods and Services Tax (GST) is an indirect tax on the supply of goods and services, introduced in India in July 2017. It replaced many older taxes such as VAT, service tax and excise duty. Different goods and services fall under different rates, and rates are revised by the GST Council from time to time, so always check the current rate for a specific item on official sources.
Intra-state supply: CGST + SGST
When the seller and buyer are in the same state, the GST is split equally between the Central GST (CGST) and the State GST (SGST). For a Union Territory without its own legislature, UTGST takes the place of SGST.
Example: a service worth ₹2,000 at an 18% GST rate, supplied within Gujarat. Total GST = 2,000 × 18 ÷ 100 = ₹360. This appears as CGST 9% = ₹180 and SGST 9% = ₹180. The bill total is ₹2,360.
Inter-state supply: IGST
When goods or services move from one state to another, Integrated GST (IGST) is charged at the full rate. The same ₹2,000 service at 18%, supplied from Gujarat to a buyer in Maharashtra, shows IGST 18% = ₹360. The amount you pay is the same; the tax is collected by the centre and shared with the destination state.
Finding the price before GST
If a price already includes GST, divide by (1 + rate ÷ 100) to find the pre-tax amount. A total of ₹2,360 at 18% gives 2,360 ÷ 1.18 = ₹2,000. Simply subtracting 18% from ₹2,360 would give the wrong figure.
Why businesses care
Registered businesses can usually claim input tax credit for GST paid on purchases used in their business, reducing the tax they pay on sales. This is why accurate invoices with correct GST details matter.
Use our percentage calculator for quick GST amounts. For tax filing or business decisions, consult a qualified tax professional.