What Is the Difference Between SGST and CGST? – A Complete Guide for 2025
Vizzve Admin
🧾 What Is the Difference Between SGST and CGST? – A Complete Guide for 2025
Published by: Vizzve Financial | Updated: May 9, 2025
Category: GST Explained | Tax Filing | Indian Finance
Reading Time: 4–5 Minutes
💡 Introduction
GST (Goods and Services Tax) has transformed India’s indirect tax system. But many taxpayers still get confused about the terms SGST and CGST. Whether you’re a business owner, freelancer, or just filing your taxes, it’s crucial to understand what these terms mean and how they affect your invoices.
📚 What Are SGST and CGST?
✅ CGST (Central Goods and Services Tax)
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Definition: CGST is the portion of GST collected by the central government on intra-state (within the same state) supply of goods and services.
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Applicability: When you sell a product or service within your own state, CGST is charged along with SGST.
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Example: If you sell goods worth ₹1,000 in Karnataka, the CGST (say 9%) = ₹90 is paid to the Central Government.
✅ SGST (State Goods and Services Tax)
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Definition: SGST is the portion of GST collected by the state government for the same intra-state transaction.
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Applicability: SGST is charged alongside CGST and is collected by your respective state government.
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Example: The same ₹1,000 sale in Karnataka will also include SGST (9%) = ₹90 to be paid to the State Government of Karnataka.
🔄 When Are SGST and CGST Applicable?
| Transaction Type | Applicable Taxes | Collected By |
|---|
| Intra-State (same state) | CGST + SGST | Central + State Government |
| Inter-State (different states) | IGST (Integrated GST) | Collected by Central Government |
🎯 Key Differences Between SGST and CGST
| Criteria | SGST | CGST |
|---|
| Full Form | State Goods and Services Tax | Central Goods and Services Tax |
| Levied By | State Government | Central Government |
| Applicable On | Intra-state transactions | Intra-state transactions |
| Share of Tax | Goes to State’s Revenue | Goes to Central Revenue |
| Input Tax Credit | Can be used only against SGST | Can be used only against CGST |
🏛️ Why Was GST Split into CGST and SGST?
India is a federal country, meaning both the Center and States have the power to levy taxes. To ensure both get a fair share of revenue, GST was divided into CGST and SGST for intra-state transactions. This promotes:
💡 Real-Life Example
If you are a shopkeeper in Delhi selling a mobile phone for ₹10,000:
🔄 What About Inter-State Transactions?
If you sell the same mobile phone from Delhi to Maharashtra, you will charge IGST (18%) = ₹1,800, and the entire tax goes to the Central Government, which later shares the state’s portion.
📢 Vizzve Financial Tip:
When filing GST returns or generating invoices, make sure you correctly identify whether it’s an intra- or inter-state transaction. Vizzve’s accounting partners can help small businesses manage this through automated GST-ready billing.
⚙️ How to File SGST and CGST?
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Register on www.gst.gov.in
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Use GST returns form GSTR-1, GSTR-3B
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File monthly or quarterly depending on turnover
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Maintain proper invoice records and HSN codes
✅ Final Summary
| SGST | CGST |
|---|
| Collected by State | Collected by Center |
| For same-state sales | For same-state sales |
| 50% of GST split | 50% of GST split |
Both are equally important and must be calculated and paid correctly to avoid penalties.
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