The GST regime in India, introduced on 1 July 2017, marked a new beginning in the Indian taxation system. GST, or the Goods and Services Tax, replaced and subsumed several indirect taxes levied by the Central and state governments, such as VAT, service tax, and excise duty, under a unified tax system. As of 2026, there are four main types of GST in India: CGST, SGST, IGST, and UTGST. The type of GST applicable depends on the nature and location of the transaction.

In this article, we’ll take a closer look at the different types of GST, their applications, calculation methods, and the rules governing their levy and collection.

What are the different types of GST in India?

GST is a unified tax system implemented in India to streamline the taxation process. For businesses, it is important to understand the different types of GST to maintain compliance, pay taxes on time, and operate smoothly. GST generally depends on the nature and place of supply, rather than simply where goods are manufactured. The applicable tax also depends on whether a transaction qualifies as an intra-State or inter-State supply under GST law.

There are primarily four types of GST in India:

• CGST (Central Goods and Services Tax): This is collected by the Central Government on intra-State supplies of goods and services, along with SGST or UTGST, as applicable.
• SGST (State Goods and Services Tax): This is collected by the State Government on intra-State supplies of goods and services, along with CGST.
• IGST (Integrated Goods and Services Tax): This is collected by the Central Government on inter-State supplies of goods and services, as well as on imports, subject to applicable GST provisions.
• UTGST (Union Territory Goods and Services Tax): This applies to intra-State supplies in Union Territories without legislatures, along with CGST. It does not apply in the same way to every Union Territory; for example, Delhi and Puducherry have their own legislatures and levy SGST.

This means that if goods or services are supplied within a state (e.g., within Maharashtra), CGST and SGST will generally be levied. However, if a supply qualifies as an inter-State transaction (e.g., between Maharashtra and Karnataka), IGST will generally apply. For supplies within a Union Territory without a legislature, CGST and UTGST generally apply. The place-of-supply rules and applicable statutory provisions determine the correct tax treatment.

Also read: GST Calculator with formula

IGST full form – Application, example, and calculation

IGST full form is Integrated Goods and Services Tax.

IGST is levied on inter-State supplies of goods and services (i.e., supplies between two or more states or union territories, subject to applicable place-of-supply rules). It is collected by the Central Government and is governed by the Integrated Goods and Services Tax Act, 2017.

IGST is also applicable to imports of goods and services under the relevant GST provisions. Exports of goods and services are generally treated as zero-rated supplies, subject to applicable conditions. The IGST collected on taxable supplies is apportioned between the Centre and the States in accordance with the law.

(Also read: How to start an import export business).

How to calculate IGST?

In our example for GST calculation, let’s assume the GST on steel bars is 18%. The applicable rate should be verified for the specific product classification and current GST notifications.

Now, if you are a steel seller in Pune, Maharashtra, selling steel worth ₹10 lakhs to a construction company in Kolkata, West Bengal, and the transaction qualifies as an inter-State supply, IGST would be charged at the assumed rate of 18%. This means that ₹1.8 lakhs will be charged as IGST and collected by the Central Government, with the revenue apportioned in accordance with the applicable law.

IGST = IGST rate × Value of taxable supply = 18% × ₹10,00,000 = ₹1,80,000

Total invoice amount = ₹10,00,000 + ₹1,80,000 (IGST) = ₹11,80,000

CGST full form – Application and example

CGST full form is Central Goods and Services Tax.

This tax is collected by the Central Government on intra-State supplies of goods and services. It is governed by the CGST Act, 2017.

Unlike IGST, when a taxable intra-State supply takes place, both CGST and SGST (or UTGST, where applicable) are generally levied at equal rates. This means that the tax revenue is apportioned between the Centre and the State or Union Territory, as applicable. For example, if the applicable GST rate on steel is 18%, CGST and SGST will generally be levied at 9% each on an intra-State supply.

In the next section, we will explain CGST calculation through an example of GST on transport. If a logistics company in Tamil Nadu provides a road transport service to a client within Tamil Nadu, we will look at how much CGST may apply, depending on the nature of the service and the applicable GST rate.

SGST full form – Calculation and application

SGST full form is State Goods and Services Tax.

This tax is collected by the State Government on intra-State supplies of goods and services. It is governed by the relevant State Goods and Services Tax Act, 2017.

For an intra-State taxable supply, both CGST and SGST generally apply at equal rates. For example, your restaurant bill may show separate CGST and SGST amounts. If the applicable GST rate is 5%, CGST and SGST would generally be 2.5% each, subject to the restaurant’s applicable GST treatment.

How to calculate CGST and SGST?

Let’s continue our example of CGST and SGST calculations for a logistics company. As mentioned, this company is based in Tamil Nadu and provides road transport services to a client in the same state. Assume the invoice value for the transportation service is ₹10,000 and the applicable GST rate is 5%. This rate is illustrative and must be verified for the specific transport service and applicable GST conditions.

CGST = (GST rate/2) × Value of services = (5% / 2) × ₹10,000 = 2.5% × ₹10,000 = ₹250

SGST = (GST rate/2) × Value of services = (5% / 2) × ₹10,000 = 2.5% × ₹10,000 = ₹250

Total invoice amount = ₹10,000 + ₹500 (GST) = ₹10,500

In this example, the transport company charges a total GST of 5%, amounting to ₹500, on the invoice. The company must report the applicable tax in its GST return and pay the net tax liability after eligible input tax credit, where applicable. The ₹500 GST comprises ₹250 CGST and ₹250 SGST.

Also read: Money Bill and Finance Bill – Understand government Bills for taxation

UTGST full form – Example with calculation

UTGST full form is Union Territory Goods and Services Tax.

In our discussion on the different types of GST in India, we now look at UTGST, which is similar to SGST but applies to intra-State supplies of goods and services within a Union Territory without a legislature. It is governed by the Union Territory Goods and Services Tax Act, 2017, and is levied along with CGST.

Note: Delhi, Jammu and Kashmir, and Puducherry have legislatures and follow the SGST framework rather than the UTGST framework.

How to calculate UTGST with example?

As explained previously, UTGST is calculated in the same way as SGST.

For example, consider the sale of steel within a Union Territory without a legislature, such as Chandigarh. If the applicable GST rate is 18%, UTGST would account for half of the total rate, i.e., 9%. If the taxable invoice value is ₹1,00,000, the calculation would be:

UTGST = (GST rate / 2) × Value of goods = (18% / 2) × ₹1,00,000 = 9% × ₹1,00,000 = ₹9,000

CGST = ₹9,000 (equal to UTGST)

Total invoice amount = ₹1,00,000 + ₹18,000 (GST) = ₹1,18,000

Therefore, for this example, the UTGST amount would be ₹9,000 on an intra-UT supply in Chandigarh, assuming the applicable GST rate is 18%.

Also read: Price of steel ingot at Mandi Gobindgarh and Daily steel price at Mandi Gobindgarh

How to determine what type of GST is applicable?

At this point, it is understandable if you wonder what type of GST will be applicable in a particular transaction – i.e., CGST, SGST, IGST, or UTGST.

Here are some of the factors that determine the type of GST applicable:

• Nature of transaction: GST applicability depends on whether a supply qualifies as an intra-State or inter-State transaction under GST law. For a taxable intra-State supply, CGST and SGST generally apply. For an inter-State supply, IGST generally applies. For a qualifying intra-State supply in a Union Territory without a legislature, CGST and UTGST apply.
• Location of seller and buyer: The location of the seller (supplier) and buyer (recipient) helps determine the applicable GST type, along with the place-of-supply rules. For instance, if a taxable supply is made within the same state (e.g., Karnataka), both CGST and SGST generally apply. If a supply qualifies as inter-State between Karnataka and Maharashtra, IGST generally applies. For qualifying intra-UT supplies in Union Territories without legislatures, such as Chandigarh, CGST and UTGST apply.
• Place of supply: The place of supply is a key factor in determining whether a transaction is intra-State or inter-State. GST law specifies how the place of supply is determined for different types of goods and services. If the supplier’s location and the place of supply are in the same State or qualifying Union Territory, CGST and SGST or UTGST generally apply, as relevant. If they are in different States or Union Territories, IGST generally applies, subject to the applicable statutory provisions.

Also read: GST registration limit in India

Comparison of GST types

As can be understood, each type of GST serves a specific purpose and contributes to the country’s revenue system at the Central, State, or Union Territory level. As a business owner, it is important to understand these differences to ensure compliance with tax regulations and streamline business operations.

IGST vs CGST vs SGST vs UTGST

Here’s a comprehensive overview of each GST type:

How to calculate GST to during ITC claim

One of the many benefits of the GST system is claiming Input Tax Credit (ITC). This means that eligible businesses can offset the GST paid on business inputs or purchases (i.e., raw materials) against the GST payable on their sales, subject to applicable ITC rules. This helps prevent the cascading effect of taxes.

So, what happens if a company in Karnataka buys raw materials from a seller in Karnataka (and pays CGST and SGST) and then sells the finished product in Mumbai? Does GST apply again, and if so, how is the available ITC used?

The utilisation of input tax credit for GST calculations follows a specific order under the CGST Act and Rules. Let’s understand how it works.

Example: Utilisation of IGST credit for IGST liability

Company A in Maharashtra buys raw materials from Company B in Rajasthan for ₹1,00,000.

• IGST paid at 18% is ₹18,000

Company A now sells the finished product to a buyer (Company C) in Maharashtra for ₹2,00,000.

• Company A will now have to pay CGST and SGST at 9% each, assuming the applicable GST rate is 18%.
• That is, CGST of ₹18,000 and SGST of ₹18,000, amounting to ₹36,000 in total.

Under the GST input tax credit rules, Company A must first use its available IGST credit to pay any IGST liability. Since this example assumes there is no IGST liability on the sale, the company can use the ₹18,000 IGST credit towards its CGST and SGST liabilities in any order.

• Total CGST and SGST liability = ₹36,000
• Less: Available IGST credit = ₹18,000
• Remaining GST liability = ₹18,000

Company A must pay the remaining ₹18,000 using eligible ITC, where available, or through the electronic cash ledger. The IGST credit must be fully utilised before CGST or SGST credit can be used to discharge the remaining tax liability, subject to the applicable rules.

Following the prescribed order for GST input tax credit utilisation helps businesses calculate their tax liability accurately and comply with GST regulations.

Conclusion

Understanding the different types of GST in India is essential for businesses looking to maintain accurate tax records, manage working capital, and avoid compliance errors. As of 2026, businesses should pay particular attention to applicable GST rates, invoice accuracy, return filing, and eligible input tax credit claims.

Errors in tax classification or ITC utilisation can lead to additional costs and compliance issues. Before issuing invoices or filing GST returns, verify the applicable provisions and the latest official notifications. A clear understanding of GST rules helps businesses improve tax planning, maintain compliance, and make informed financial decisions as India’s indirect taxation framework evolves.

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