CGST
Definition
Central GST — the portion of GST collected by the Central Government on intra-state transactions. For any intra-state sale, GST is split equally between CGST and SGST. For example, on an 18% GST item, 9% goes to CGST and 9% to SGST.
Why is CGST Important?
Navigating the Indian tax system requires a clear understanding of terms like CGST. With the introduction of the new income tax regime alongside the old one, taxpayers must evaluate their deductions, exemptions, and tax brackets carefully. This concept is a key component in optimizing your tax liabilities under the Income Tax Act and GST framework.
Proper tax planning using this metric can help individuals and businesses maximize their take-home income while remaining fully compliant with government regulations. We provide free tax calculators to help you estimate these figures accurately and make informed decisions before filing your returns.
What is CGST?
Central Goods and Services Tax (CGST) is the portion of GST collected by the Central Government on intra-state (within the same state) supply of goods and services. CGST is always charged alongside SGST in equal proportions.
How CGST Works
| Transaction Type | Tax Applied | Example (18% GST) |
|---|---|---|
| Within same state | CGST (9%) + SGST (9%) | ₹1,000 + ₹90 CGST + ₹90 SGST = ₹1,180 |
| Between states | IGST (18%) | ₹1,000 + ₹180 IGST = ₹1,180 |
The total tax is the same (18%), but the division between central and state governments changes based on whether the transaction is intra-state or inter-state.