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CGST

Tax

Central Goods and Services Tax

The central government's half of GST charged on intra-state transactions in India, collected alongside an equal SGST share and going to the central treasury.

Definition

CGST is the central government's share of India's Goods and Services Tax, charged on transactions occurring within a single state. It's always collected in equal measure alongside SGST, together forming the total GST rate applied to an intra-state sale.

For a sale carrying an 18% GST rate within one state, 9% is CGST and 9% is SGST. This structure is specific to intra-state transactions, inter-state sales instead use IGST, a single unified tax that gets settled differently between governments afterward.

Formula

CGST = Transaction Value × (GST Rate / 2)

Worked Example

A shop in Maharashtra sells goods worth ₹30,000 to a customer in the same state, with a 12% GST rate applying.

  • Total GST: ₹30,000 × 12% = ₹3,600
  • CGST (half): ₹3,600 / 2 = ₹1,800
  • SGST (half): ₹3,600 / 2 = ₹1,800

Both amounts appear as separate line items on the invoice, routing to the central and state treasuries respectively.

Key Things to Know

  • Only applies to intra-state sales, always paired with SGST. CGST never appears alone or in a different ratio, it's a fixed 50-50 split with SGST.
  • Rate is set nationally by the GST Council. Despite being a central tax, the specific rate applied is decided through the same unified process as SGST.
  • IGST replaces this pairing for cross-state sales. CGST and SGST don't apply at all once a transaction crosses a state boundary.
  • Input tax credit rules generally keep CGST credit within its own category. It typically offsets CGST liability, following GST's cross-utilization framework for edge cases involving IGST.
  • Revenue goes to the central government. This funds central spending, distinct from the state government funding that SGST revenue supports.

Related Terms

SGSTState Goods and Services Tax

Frequently Asked Questions

Is CGST the entire GST rate or just half?
Just half, for intra-state sales. CGST is always matched by an equal [SGST](/glossary/sgst/) amount, together making up the full GST rate charged on the transaction.
What replaces CGST for inter-state sales?
IGST, a single combined tax collected by the central government and later apportioned between the origin and destination states, rather than the CGST plus SGST split used within a single state.
Who sets the CGST rate?
The GST Council, a joint body of central and state finance ministers, sets rates uniformly across the country, CGST isn't something the central government adjusts independently.
Can CGST input credit offset SGST liability?
Generally not directly, input tax credit rules keep CGST and SGST credit largely within their own categories, with IGST credit acting as more of a bridge between the two under specific utilization rules.
Does CGST apply to services as well as goods?
Yes, CGST applies to both goods and services under India's unified GST framework, following the same split structure with SGST for intra-state transactions of either type.