GST Guide
Plain-language answers to the questions people ask most often when they first encounter GST.
What is GST?
GST (Goods and Services Tax) is a single indirect tax charged on the supply of most goods and services in India. It replaced a range of earlier central and state taxes, such as VAT, service tax and excise duty, with one unified tax structure.
What is CGST?
CGST (Central GST) is the share of GST collected by the central government on a sale made within a single state. It is charged alongside an equal share of SGST.
What is SGST?
SGST (State GST) is the share of GST collected by the state government where the sale takes place. Like CGST, it only applies to intra-state transactions and is equal in amount to the CGST charged.
What is IGST?
IGST (Integrated GST) applies when goods or services move between two different states, or are imported into India. Instead of splitting into CGST and SGST, the full GST amount is charged as IGST and later distributed to the destination state.
What is GSTIN?
A GSTIN (GST Identification Number) is a unique 15-character number issued to every business registered under GST. It identifies the business's state, PAN, and registration status on every invoice it issues.
What is Input Tax Credit?
Input Tax Credit (ITC) lets a registered business reduce the GST it owes on sales by the GST it already paid on its own purchases, avoiding tax being charged multiple times on the same value as goods move through a supply chain.
What is Taxable Value?
Taxable value is the price of a good or service after discounts but before GST is added — it's the base amount that the GST percentage is actually calculated on.
What is a GST Invoice?
A GST invoice is a bill issued by a registered seller that shows the taxable value, the applicable GST rate, and the GST amount (split into CGST/SGST or shown as IGST), along with both parties' GSTIN where applicable.
How is GST Calculated?
GST is calculated as a percentage of the taxable value: GST Amount = Taxable Value × Rate ÷ 100. The final price a customer pays is the taxable value plus this GST amount. Try it on our GST Add Calculator.
How to Remove GST from an Amount
If a price already includes GST, divide it by (1 + rate ÷ 100) to recover the original taxable value, then subtract that from the total to see the GST portion. Try the GST Remove Calculator.
Difference Between CGST and SGST
CGST and SGST are charged together, in equal halves, on sales within the same state — the only difference is which government (central or state) receives each half.
Difference Between GST and IGST
"GST" is the overall tax system, while IGST is specifically the form GST takes for inter-state and import transactions, replacing the CGST + SGST split used for intra-state sales.