SGST vs IGST
Two GST components for different borders — state tax on local sales versus integrated tax on cross-state movement.
Start here
State GST (SGST) is the state component levied on intra-state supplies and credited to the consuming state; Integrated GST (IGST) is the inter-state tax collected by the Centre and apportioned to the destination state.
India’s dual GST splits every transaction by geography. If goods never leave Maharashtra, you see CGST + SGST. If a Pune factory ships to Bengaluru, SGST disappears and IGST takes over — not as an extra tax, but as a bridge for seamless Input Tax Credit across states.
UPSC tests whether you know who collects what, where revenue ultimately lands, and why IGST is not a “third tax” on top of GST.
Side-by-side comparison
| Feature | SGST | IGST |
|---|---|---|
| Legal basis | State GST Act, 2017 | Integrated GST Act, 2017 |
| Input Tax Credit | Set off against CGST on same invoice | Enables cross-state credit chain via IGST pool |
| Export treatment | Zero-rated with refund of accumulated ITC | Zero-rated; IGST may be paid then refunded |
| Constitutional anchor | Article 246A — states levy on intra-state supply | Article 269A — inter-state supply assigned to Centre for apportionment |
| Invoice display | Shown as SGST (half of total rate) on intra-state bills | Single IGST line replaces CGST+SGST on inter-state bills |
| Compensation cess | Not levied as SGST; cess applies separately on notified goods | IGST + cess on luxury/sin goods; settlement via GST Council pool |
At a glance
Transaction type
Intra-state (within one state)
Inter-state (across states) + imports
Collected by
State Government
Central Government (then shared)
Revenue goes to
Originating / consuming state directly
Destination state after IGST settlement
Typical rate split
Half of total GST (e.g. 9% of 18%)
Full combined rate (e.g. 18%)
Cafe bill in Mumbai vs parcel to Delhi
You pay ₹500 for a meal at a Mumbai café. On an 18% GST rate, the bill shows 9% CGST + 9% SGST — both collected on the same sale, split between Centre and Maharashtra. Now order the same packaged snacks from Mumbai to a Delhi customer: the invoice shows 18% IGST (collected by Centre). Maharashtra gets SGST credit on inputs; Delhi receives its share after IGST settlement. One nation, one tax rate — different routing.
What this means for the exam
Intra-state = CGST + SGST | Inter-state = IGST | IGST rate = CGST + SGST combined.
Understand the difference
Why IGST exists
Before GST, a manufacturer in Gujarat paid state VAT but could not easily set it off against Central excise when selling to Tamil Nadu. IGST creates a single inter-state tax collected centrally, with an automated clearing house that transfers revenue to the consumption state — preserving destination-based taxation without breaking the credit chain.
Prelims statement check
“IGST is an additional tax levied over and above CGST and SGST on inter-state sales.”
Incorrect — Third tax myth
IGST replaces CGST + SGST on inter-state supply; it is not an extra layer.
“IGST on inter-state supply is collected by the Central Government.”
Correct — Collection rule
Centre collects IGST and apportions to destination states per GST law.
PYQ Linkage
Under GST, inter-state supply of goods is taxed under:
Key Takeaway
SGST = within state | IGST = across states (Centre collects, destination state benefits)