The one rule behind CGST, SGST and IGST
Compare two places: where you, the supplier, are and the place of supply.
| Supplier’s location vs place of supply | Type of supply | Tax you charge |
|---|---|---|
| Same state or same union territory | Intra-state (IGST Act, section 8) | CGST + SGST (or UTGST) |
| Different states, or a state and a union territory | Inter-state (section 7) | IGST |
Supplies to or by an SEZ unit or developer are never intra-state; they are treated as inter-state.
The total rate is the same either way. On ₹1,00,000 at 18%, it is ₹9,000 CGST + ₹9,000 SGST, or ₹18,000 IGST. What changes is which government gets the money and which ledger the buyer’s credit sits in.
Goods (IGST Act, section 10)
| Situation | Place of supply |
|---|---|
| Goods move to the buyer | Where the movement ends for delivery |
| Bill-to, ship-to: you deliver to someone else on a third person’s instructions | The principal place of business of that third person |
| No movement (the buyer collects, or goods are already there) | Where the goods are at delivery |
| Assembled or installed at site | The site |
Example 1, simple sale. Kaveri Agencies, Mysuru (Karnataka), sells goods worth ₹1,00,000 at 18%.
- Delivered to a buyer in Chennai: place of supply Tamil Nadu. Charge ₹18,000 IGST.
- Delivered to a buyer in Mysuru: place of supply Karnataka. Charge ₹9,000 CGST + ₹9,000 SGST.
Example 2, bill-to, ship-to. Shree Lakshmi Hardware, Bengaluru, buys ₹2,00,000 of goods from Kaveri Agencies. Shree Lakshmi asks Kaveri to ship them straight to its own customer in Hosur, Tamil Nadu.
- Kaveri to Shree Lakshmi: place of supply is Shree Lakshmi’s principal place of business, Karnataka. Kaveri is in Karnataka, so it charges ₹18,000 CGST + ₹18,000 SGST, although the goods go to Tamil Nadu.
- Shree Lakshmi to its Hosur customer: the movement ends in Tamil Nadu, so Shree Lakshmi charges IGST.
- The e-way bill shows both: bill to Shree Lakshmi, ship to Hosur. From 1 Aug 2026 the portal asks for the ship-to GSTIN, or “URP” if that party is unregistered.
A new clause, section 10(1)(ca), on goods sold to unregistered buyers, was added by the IGST (Amendment) Act, 2023. CBIC’s text marks it as not yet brought into force. Check the current position before you rely on it.
Services within India (IGST Act, section 12)
| Service | Place of supply |
|---|---|
| Most services to a registered buyer | The buyer’s location |
| Most services to an unregistered buyer | The buyer’s location if you have an address on record; otherwise your location |
| Services on immovable property, hotel stays, function venues | Where the property is |
| Restaurant and catering, grooming, fitness, beauty treatment | Where the service is actually performed |
| Transport of goods | To a registered buyer: the buyer’s location. To anyone else: where the goods are handed over for transport |
Example 3, a service to a registered client. A CA firm in Pune bills a registered client in Bengaluru ₹50,000 + 18%. The place of supply is Karnataka, the client’s location. The firm is in Maharashtra, so it charges ₹9,000 IGST.
Example 4, a hotel. A Bengaluru company books a ₹6,000-a-night room in Goa. The place of supply is Goa, where the hotel is, so the hotel charges Goa’s CGST + SGST.
Transport of goods since 1 Oct 2023. The proviso to section 12(8), which made the destination the place of supply for some goods transport, was omitted by the Finance Act, 2023. The plain rule in the table above now applies.
Quick checks before you raise an invoice
- Is the buyer registered? Check the GSTIN and its first two digits, the state code.
- Goods or services? Then find the right row above.
- Did someone other than the buyer ask you to ship elsewhere? Then it is bill-to, ship-to.
- Is your billing address the same state as the place of supply? Same state means CGST + SGST; different means IGST.
Try a case in the place-of-supply checker or split an amount with the GST calculator.
How MyRecords helps
- Picks CGST + SGST or IGST by place of supply. Since 1 Nov 2026 MyRecords applies the right heads from the place of supply on each quotation, order, delivery, invoice and purchase document.
- Keeps GSTIN and state on each customer address, with a GSTIN checksum check, so the place of supply has the right inputs.
- Prints a GST tax invoice by default, with HSN codes and the customer’s GSTIN.
- Carries the split into returns: inter-state sales to unregistered buyers go to the right GSTR-1 and GSTR-3B tables in the files it prepares.