Complete Guide to GST Rates in India: CGST, SGST, IGST & Invoicing Rules
The Goods and Services Tax (GST) transformed India's indirect tax landscape by unifying central excise, service tax, VAT, and luxury levies into a single destination-based consumption tax.
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1. The Three Forms of GST: CGST, SGST, and IGST Explained
Because India is a federal constitutional republic, both the Central Government and State Governments share taxing power over domestic commerce. The type of GST applied depends directly on the location of the supplier and place of supply:
Intra-State Transactions (Same State)
When the seller and buyer are registered in the same state (e.g. Maharashtra to Maharashtra), the tax is divided equally into two parts:
Inter-State Transactions (Different States)
When goods or services move across state borders (e.g. Karnataka to Tamil Nadu), Integrated GST (IGST) is levied in full by the Center and apportioned between jurisdictions:
2. Detailed Slabs & Common Product Classifications
| Tax Tier | Objective / Focus | Typical Items Included |
|---|---|---|
| 0% (Nil) | Zero tax on subsistence foods | Unprocessed grains, raw vegetables, fresh milk, unbranded flour, salt, bread. |
| 5% | Low rate for mass consumption items | Spices, tea, coffee, edible oil, skimmed milk powder, life-saving medicines, rail transport. |
| 12% | Standard rate for value-added foods & equipment | Butter, cheese, frozen meat products, sewing machines, computers, umbrella, diagnostic kits. |
| 18% | General rate for most services and manufactured goods | IT software, banking services, telecom, restaurants, industrial equipment, capital goods. |
| 28% | High rate on luxury and sin goods | Motor vehicles, air conditioners, pan masala, gaming, lottery, luxury yachts. |
3. Mandatory Invoicing Requirements
To maintain full compliance and enable clients to claim Input Tax Credit, a tax invoice must legally display:
- Supplier's legal trade name, address, and 15-digit GSTIN.
- Consecutive tax invoice serial number unique for the financial year.
- Date of invoice issuance.
- Recipient's name, billing address, and GSTIN (for B2B transactions).
- Harmonized System of Nomenclature (HSN) code for goods or Service Accounting Code (SAC) for services.
- Detailed taxable value and breakdown of CGST, SGST, or IGST amounts.