CGST Full Form: Meaning, Rate and Calculation CGST is generally levied when a taxable supply is classified as an intrastate supply under GST law.

CGST stands for Central Goods and Services Tax. It is the central component of India's Goods and Services Tax (GST) system, generally charged on eligible intrastate supplies of goods and services. The Central Goods and Services Tax Act, 2017, governs CGST.

Understanding CGST helps business owners, accountants and students understand how GST is calculated and reported.

What Is CGST in GST?

CGST is generally levied when a taxable supply is classified as an intrastate supply under GST law. In such cases, CGST is usually charged alongside State Goods and Services Tax (SGST).

For example, when a business in Jaipur makes an eligible taxable supply to a customer in Rajasthan, the transaction may attract both CGST and SGST.

The correct tax treatment depends on the supplier's location, the place of supply and the applicable GST provisions.

What Is the Meaning of CGST?

The CGST meaning refers to the central tax component collected under India's GST framework. For eligible intrastate supplies, CGST and SGST are generally charged together, and their combined rate equals the applicable GST rate.

For example, if a taxable supply attracts GST at 18%, the usual breakdown is 9% CGST and 9% SGST.

What Is the CGST Rate?

There is no single CGST rate for every product or service. The applicable rate depends on the classification of the supply and the relevant GST rate notification.

For instance, where the combined GST rate is 18%, the CGST component is generally 9% for an eligible intrastate supply. Other GST slabs result in different CGST rates.

Businesses should verify the applicable rate before issuing invoices or calculating tax.

Who Collects CGST?

CGST is a central tax administered by the Central Government. Registered businesses collect the applicable tax on taxable supplies, report it through GST returns and pay their tax liabilities according to the prescribed rules.

Eligible businesses may also claim input tax credit, subject to the conditions and restrictions under GST law.

What Is the Difference Between CGST and SGST?

The main difference is the government associated with each tax component.

• CGST: The central component of GST on eligible intrastate supplies.
• SGST: The state component of GST on eligible intrastate supplies.

For an eligible supply taxed at 18%, a business would generally charge 9% CGST and 9% SGST. Interstate supplies generally attract IGST instead, subject to the applicable rules.

Read our related SGST glossary to understand the state tax component, and explore the Paytaxs GST glossary for more GST terminology.

How Is CGST Calculated?

CGST is calculated by multiplying the taxable value by the applicable CGST rate.

Example: If the taxable value is ₹10,000 and the applicable CGST rate is 9%, the CGST amount is ₹900. If SGST also applies at 9%, the total GST is ₹1,800.

This example assumes an eligible intrastate supply taxable at a combined rate of 18%.

For help with GST-related requirements, visit Paytaxs to explore available services.