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GST was sold as "one nation, one tax," and then the first invoice you make asks you to choose between four taxes. The confusion is understandable — and clearing it takes ten minutes, because the four types aren't four different taxes at all. They're one tax, split by geography so the Centre and states each get their share.
The four types
CGST — Central GST. The Centre's half of tax on intra-state supplies (seller and buyer in the same state).
SGST — State GST. The state's half of the same intra-state supply. CGST and SGST always appear together, each at half the total rate: an 18% service billed within Karnataka = CGST 9% + SGST 9%.
IGST — Integrated GST. The whole tax on inter-state supplies (seller and buyer in different states), collected by the Centre and later apportioned to the destination state. Same 18% service billed from Karnataka to a client in Maharashtra = IGST 18%. One line instead of two — the rate doesn't change, only the split.
UTGST — Union Territory GST. SGST's twin for Union Territories without their own legislature (Chandigarh, Andaman & Nicobar, Ladakh, etc.). Intra-UT supply = CGST + UTGST. Delhi, Puducherry and J&K have legislatures, so they use SGST.
That's the entire system: same state → CGST + SGST/UTGST, split half-half; different states → IGST, full rate. Imports are treated as inter-state (IGST + customs duties). Exports are zero-rated.
Place of supply: the rule that picks the tax
Which type applies isn't about where you are — it's about place of supply, a defined concept:
- Goods: generally where the goods end up (delivery terminates)
- Services, B2B: the recipient's registered location
- Services, B2C: the recipient's address on record, else the supplier's location
- Special overrides that hit real businesses:
- Event-related services (photography at a wedding, decor, catering, planning): place of supply is where the event happens for B2C — a Bengaluru photographer shooting a Goa wedding for an individual bills IGST (place of supply: Goa)
- Immovable-property services (hotels, venues): always the property's location — which is why hotel bills are always CGST+SGST, even for out-of-state guests
- Restaurants: where the food is served
Wedding professionals cross state lines constantly, which makes them the rare small business that genuinely needs the place-of-supply table. Destination weddings are the classic case — our GST rates for wedding services guide works through the scenarios.
Why getting the split right matters
1. Input credit set-off rules. ITC of IGST can pay IGST, then CGST, then SGST. But CGST credit can never pay SGST, and vice versa. Charge the wrong type and your client may hold credit they can't use.
2. Wrong-type payment isn't adjustable. Paid CGST+SGST when it should've been IGST? You pay IGST again and claim a refund of the wrong payment — a months-long cash-flow hole, not a netting entry.
3. Your client's compliance. B2B clients' returns auto-populate from your filings; a wrong-type invoice creates reconciliation mismatches with their accountant's name on them. That's a vendor-relationship cost, not just a tax one.
Quick worked examples
| Scenario | Tax on invoice |
|---|---|
| Pune makeup artist, bride in Pune, ₹40,000 @18% | CGST ₹3,600 + SGST ₹3,600 |
| Pune makeup artist, wedding in Udaipur (B2C), ₹40,000 | IGST ₹7,200 (event location: Rajasthan) |
| Delhi photographer, corporate client registered in Gurgaon | IGST 18% (recipient's state: Haryana) |
| Chandigarh salon, local walk-in | CGST 9% + UTGST 9% |
| Kochi hotel room, guest's company registered in Mumbai | CGST + SGST (property location: Kerala) |
Getting it right without memorising
The split is pure logic once place of supply is known — which means software should do it, not you. BrightDesk's GST invoice generator switches between CGST/SGST and IGST from the client's state automatically, keeps the mandatory tax-invoice fields in place, and formats the whole thing in under a minute. For where these amounts flow next — returns and credits — see GST return filing and input tax credit explained.