SGST
SGST stands for State Goods and Services Tax. It is the component of GST that is levied by the state government (or Union Territory government) on the intra-state supply of goods and services — that is, transactions where both the supplier and the place of supply are within the same state. SGST is always charged alongside CGST at equal rates, together making up the total GST on an intra-state transaction.
SGST is governed by the SGST Act enacted by each individual state (mirroring the Central CGST Act), and the revenue collected goes entirely to the respective state government.
How SGST Works
Whenever a supplier and buyer are located in the same state, the total GST on the transaction is split equally into two components:
CGST — collected by the central government
SGST — collected by the state government
For example, if a business in Mumbai supplies services to a client also in Mumbai, and the applicable GST rate is 18%, then:
- CGST charged: 9%
- SGST charged: 9%
- Total GST: 18%
Both amounts are shown separately on the tax invoice and deposited to their respective governments.
SGST vs. IGST vs. CGST
| Tax | Full Form | Applies When | Revenue Goes To |
|---|---|---|---|
| CGST | Central GST | Intra-state supply | Central government |
| SGST | State GST | Intra-state supply | State government |
| IGST | Integrated GST | Inter-state supply or export | Central govt (shared with states) |
When a transaction crosses state boundaries, IGST applies instead of CGST + SGST. The place of supply determines which tax applies.
SGST Rates
SGST rates mirror CGST rates exactly. The standard GST rate slabs and their SGST components are:
| Total GST Rate | CGST Component | SGST Component |
|---|---|---|
| 5% | 2.5% | 2.5% |
| 12% | 6% | 6% |
| 18% | 9% | 9% |
| 28% | 14% | 14% |
Input Tax Credit on SGST
A GST-registered business that pays SGST on its purchases (inward supplies) can claim it as Input Tax Credit (ITC) and use it to offset its SGST liability on outward supplies. The order of ITC utilisation under GST rules is:
SGST ITC is first used to offset SGST liability. Any remaining SGST ITC can then be used to offset IGST liability. SGST ITC cannot be used to offset CGST liability.
SGST in Union Territories
Union Territories without a legislature (such as Chandigarh, Dadra and Nagar Haveli, Lakshadweep) levy UTGST (Union Territory GST) instead of SGST. UTGST functions identically to SGST — it is charged at the same rate, shown on invoices alongside CGST, and the revenue goes to the Union Territory administration. Union Territories with their own legislature (Delhi and Puducherry) levy SGST like other states.
SGST on a Tax Invoice
On a GST invoice, SGST is shown as a separate line item. A typical intra-state invoice looks like:
Taxable Value: ₹10,000 CGST @ 9%: ₹900 SGST @ 9%: ₹900 Total: ₹11,800
For self-employed professionals and freelancers supplying services to clients in the same state, SGST is the state-level tax they charge alongside CGST on every tax invoice.
Use JetInvoice's free GST Invoice Generator to automatically calculate and split CGST and SGST on intra-state invoices — no manual calculation required.