GST for Indian SMBs: a plain-English guide to CGST, SGST, and IGST
Priya Sharma
· 6 min read
GST invoicing trips up a lot of first-time business owners not because the math is hard, but because the rules for which tax applies depend on where the buyer and seller are registered — not just where the goods or services are delivered.
The core rule: place of supply decides the split
If the buyer and seller are registered in the same state, the transaction is intra-state and is taxed as CGST (Central GST) plus SGST (State GST), each typically at half the applicable GST rate. If they're in different states, the transaction is inter-state and is taxed as IGST (Integrated GST) at the full rate instead.
For example, an 18% GST rate becomes 9% CGST + 9% SGST for an intra-state sale, or a single 18% IGST charge for an inter-state sale. The total tax collected is the same either way — only the split and the ledger it's recorded against changes.
Why this matters for invoicing software
An invoicing tool that doesn't know the buyer's registered state can't compute the correct split automatically, which means the business owner has to get it right manually on every invoice — a common source of compliance errors.
VoyceBook determines place of supply from the customer's registered GSTIN and billing state, and computes CGST/SGST or IGST automatically before the invoice is generated.
TDS and TCS
Separately from GST, some transactions also attract TDS (Tax Deducted at Source) or TCS (Tax Collected at Source) under the Income Tax Act. These are deducted or collected in addition to GST and reported separately — they don't change the GST calculation itself, but they do change the net amount actually paid or received.