{"id":11980,"date":"2024-07-26T16:06:12","date_gmt":"2024-07-26T10:36:12","guid":{"rendered":"https:\/\/razorpay.com\/learn\/?p=11980"},"modified":"2025-02-27T11:57:58","modified_gmt":"2025-02-27T06:27:58","slug":"what-is-cgst","status":"publish","type":"post","link":"https:\/\/razorpay.com\/learn\/what-is-cgst\/","title":{"rendered":"What is CGST (Central Goods and Service Tax)? Full Form, Meaning &#038; Features"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e007bbd16e4\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e007bbd16e4\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/learn\/what-is-cgst\/#What-is-CGST\" >What is CGST?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/learn\/what-is-cgst\/#How-to-Calculate-CGST\" >How to Calculate CGST?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/learn\/what-is-cgst\/#Formula-for-Calculating-CGST\" >Formula for Calculating CGST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/learn\/what-is-cgst\/#CGST-Calculation-with-Example\" >CGST Calculation with Example<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/learn\/what-is-cgst\/#CGST-Slab-Rates\" >CGST Slab Rates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/learn\/what-is-cgst\/#Features-of-CGST\" >Features of CGST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/learn\/what-is-cgst\/#Benefits-of-CGST\" >Benefits of CGST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/learn\/what-is-cgst\/#About-CGST-Act\" >About CGST Act<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/razorpay.com\/learn\/what-is-cgst\/#CGST-Rules\" >CGST Rules<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What-is-CGST\"><\/span><b>What is CGST?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\"><strong>CGST <\/strong>stands for<strong> Central Goods and Services Tax<\/strong>, is a tax levied by the central government on the supply of goods and services within a state in India. It replaces all earlier central indirect taxes such as VAT, service tax and central excise duty, to create a unified tax structure for intrastate transactions.<\/span><\/p>\n<p><em><strong>Related Read: <a href=\"https:\/\/razorpay.com\/learn\/what-is-igst\/\">What is IGST?<\/a><\/strong><\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How-to-Calculate-CGST\"><\/span><b>How to Calculate CGST?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\"><strong>STEP 1: Determine the transaction value:<\/strong> This is the price at which goods or services are sold.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>STEP 2: Identify the CGST rate:<\/strong> Based on the type of goods or services.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>STEP 3: Apply the formula:<\/strong> Calculate CGST using the formula above.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Formula-for-Calculating-CGST\"><\/span><b>Formula for Calculating CGST<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The formula for calculating CGST is straightforward:<\/span><\/p>\n<p style=\"text-align: left;\"><strong>CGST = (CGST Rate \/ 100) * Taxable Value<\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"CGST-Calculation-with-Example\"><\/span><b>CGST Calculation with Example<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Common list of CGST applicable items include electronics, food and beverages, clothing, and professional services.<\/p>\n<p><strong>Here\u2019s an example to illustrate it better:\u00a0<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">Imagine you run a business in Delhi and sell a table for \u20b910,000. <\/span><span style=\"font-weight: 400;\">The applicable GST rate on furniture is 18%, split equally into 9% CGST and 9% SGST. Therefore, \u20b9900 is charged as CGST and \u20b9900 as SGST, making the total cost for the customer \u20b911,800. The \u20b9900 collected as CGST goes to the central government, while the \u20b9900 collected as SGST goes to the Delhi state government.<\/span><\/p>\n<p><b>Related Read: <\/b><a href=\"https:\/\/razorpay.com\/learn\/gst-rate-on-furniture\/\"><b>GST Rate on Furniture \u2013 Latest Wooden, Plastic, &amp; Steel Furniture GST Rates<\/b><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"CGST-Slab-Rates\"><\/span><b>CGST Slab Rates<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<table>\n<tbody>\n<tr>\n<td>\n<h3><b>CGST Slab Rate<\/b><\/h3>\n<\/td>\n<td>\n<h3><b>Examples of Goods &amp; Services<\/b><\/h3>\n<\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">0%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Essential goods like fresh fruits, vegetables, and bread<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">5%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Items such as essential food items, transportation services, and some medicines.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">12%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Products like processed foods, computers, and certain services.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">18%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Majority of goods and services, including smartphones, restaurant services, software and banking services<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">28%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Luxury goods such as high-end cars, luxury hotels, tobacco, and high-end electronics.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Special Rates<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Certain goods\/services may have special rates, including specific sectors like mining or telecommunications.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><b>Related Read: <\/b><a href=\"https:\/\/razorpay.com\/learn\/gst-on-cars\/\"><b>GST on Cars in India: GST Rates for New, Used and Electric Cars<\/b><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Features-of-CGST\"><\/span><b>Features of CGST<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-sourcepos=\"5:1-5:46\">The Central Goods and Services Tax (CGST) is a crucial component of India&#8217;s indirect tax regime.<\/p>\n<p data-sourcepos=\"5:1-5:46\"><strong>Its core features include:<\/strong><\/p>\n<ul data-sourcepos=\"7:1-7:70\">\n<li data-sourcepos=\"7:1-7:70\"><strong>Levy and Scope:<\/strong> CGST is imposed by the Central Government on the intra-state supply of goods and services.<\/li>\n<li data-sourcepos=\"8:1-8:109\"><strong>Input Tax Credit (ITC):<\/strong> Businesses can offset the tax paid on inputs against the tax charged on outputs, improving cash flow.<\/li>\n<li data-sourcepos=\"9:1-9:130\"><strong>Self-Assessment:<\/strong> Taxpayers are responsible for calculating and remitting the tax, promoting transparency and accountability.<\/li>\n<li data-sourcepos=\"10:1-10:130\"><strong>Dual Control:<\/strong> While the Central Government levies CGST, its administration and collection are shared with state governments.<\/li>\n<li data-sourcepos=\"11:1-11:115\"><strong>Technology-Driven:<\/strong> The GST system relies heavily on technology for registration, returns filing, and payment.<\/li>\n<li data-sourcepos=\"12:1-13:0\"><strong>Anti-Profiteering Measures:<\/strong> Provisions to ensure that the benefits of reduced tax rates are passed on to consumers.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Benefits-of-CGST\"><\/span><b>Benefits of CGST<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Streamlined taxation:<\/b><span style=\"font-weight: 400;\"> Multiple indirect taxes have been consolidated into a single tax, simplifying the tax structure for businesses.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Input tax credit:<\/b><span style=\"font-weight: 400;\"> Businesses can set off the tax paid on purchases (inputs) against the tax collected on sales (outputs), reducing the overall tax burden.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Better compliance:<\/b><span style=\"font-weight: 400;\"> The GST regime, including CGST, is technology-driven, making it easier to monitor and enforce tax compliance.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Multiple tax slabs:<\/b><span style=\"font-weight: 400;\"> Different tax rates are applied to various goods and services, allowing for differentiated taxation based on product categories.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Composition scheme:<\/b><span style=\"font-weight: 400;\"> Small taxpayers can opt for a simplified tax regime with lower compliance requirements and a fixed tax rate.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reduction in tax evasion:<\/b><span style=\"font-weight: 400;\"> The GST system with robust tracking mechanisms has made tax evasion more difficult.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Single indirect tax:<\/b><span style=\"font-weight: 400;\"> The introduction of GST, including CGST, has created a uniform tax system across the country, eliminating cascading effects of taxes.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"About-CGST-Act\"><\/span><b>About CGST Act<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The CGST Act, 2017 is a key component of India&#8217;s Goods and Services Tax (GST) framework. It governs the levy and collection of Central Goods and Services Tax on all intra-state supplies of goods and services. The Act outlines provisions for self-assessment by taxpayers, input tax credit, compliance audits, and recovery of tax arrears. Designed to streamline tax administration and reduce the tax burden, the CGST Act ensures a uniform tax structure across states, facilitating easier business operations and more efficient tax collection.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"CGST-Rules\"><\/span><b>CGST Rules<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><b>1. Tax Invoice Issuance<\/b><\/h3>\n<ul>\n<li><span style=\"font-weight: 400;\">Issue a <a href=\"https:\/\/razorpay.com\/blog\/tax-invoice\/\">tax invoice<\/a> for all taxable goods and services if registered for GST.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">For <a href=\"https:\/\/razorpay.com\/learn\/gst-composition-scheme-benefits\/\">GST composition scheme<\/a> registrants, issue a bill of supply instead.<\/span><\/li>\n<\/ul>\n<h3><b>2. Invoice Requirements<\/b><\/h3>\n<ul>\n<li><span style=\"font-weight: 400;\">Ensure each invoice has a unique serial number and is noted in sequential order.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Include your name, address, place of supply, and GSTIN on the tax invoice.<\/span><\/li>\n<\/ul>\n<h3><b>3. GST Rates<\/b><\/h3>\n<ul>\n<li><span style=\"font-weight: 400;\">CGST and SGST are equally filed. For a GST rate of 18%, CGST is 9% and SGST is 9%.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">For out-of-state sales, levy IGST.<\/span><\/li>\n<\/ul>\n<h3><b>4. Purchasing Advice<\/b><\/h3>\n<ul>\n<li><span style=\"font-weight: 400;\">Prefer to avoid buying goods or services from unregistered dealers.<\/span><\/li>\n<\/ul>\n<h3><b>5. GST Filing<\/b><\/h3>\n<ul>\n<li><span style=\"font-weight: 400;\">Ensure accurate GST filing for both intra-state and inter-state transactions.<\/span><\/li>\n<\/ul>\n<h3><b>6. Documentation<\/b><\/h3>\n<ul>\n<li><span style=\"font-weight: 400;\">Issue a tax invoice for all chargeable sales of goods and services.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Collect tax invoices for all purchases made.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Include both your GSTIN and the client\u2019s GSTIN in your documents.<\/span><\/li>\n<\/ul>\n<h3><b>7. Timely Submission<\/b><\/h3>\n<ul>\n<li><span style=\"font-weight: 400;\">Submit all documentation within the required time frame to avoid penalties.<\/span><\/li>\n<\/ul>\n<p><em><strong>Read About: <a href=\"https:\/\/razorpay.com\/learn\/what-is-cgst-sgst-igst\/\">Difference Between SGST, CGST, IGST, UTGST<\/a><\/strong><\/em><\/p>\n<h3><b>FAQs<\/b><\/h3>\n<h3><b>1. What is the full form of CGST?<\/b><\/h3>\n<p>The CGST full form is Central Goods and Services Tax.<\/p>\n<h3><b>2. Who is required to register under CGST?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Businesses with an annual turnover exceeding INR 20 lakhs (INR 10 lakhs for special category states).<\/span><\/p>\n<h3><b>3. What is the threshold for CGST registration?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The threshold is INR 20 lakhs for most states and INR 10 lakhs for special category states.<\/span><\/p>\n<h3><b>4. How do I register for CGST?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">You can register for CGST through the GST portal by submitting the required documents and information.<\/span><\/p>\n<h3><b>5. How is the place of supply determined for CGST?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The place of supply is determined based on the location of the supplier and the place of consumption of goods or services.<\/span><\/p>\n<h3><b>6. Who bears the burden of CGST (buyer or seller)?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The buyer bears the burden of CGST as it is added to the purchase price.<\/span><\/p>\n<h3><b>7. How do I file CGST returns?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">CGST returns can be filed online through the GST portal by following the prescribed format and guidelines.<\/span><\/p>\n<h3><b>8. What is the deadline for filing CGST returns?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The deadline for filing monthly CGST returns is the 20th of the following month.<\/span><\/p>\n<h3><b>9. How do I make CGST payments?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">CGST payments can be made online through the GST portal using various payment methods like net banking, credit\/debit cards, and <a href=\"https:\/\/razorpay.com\/learn\/neft\/\">NEFT<\/a>\/<a href=\"https:\/\/razorpay.com\/learn\/rtgs\/\">RTGS<\/a>.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is CGST? CGST stands for Central Goods and Services Tax, is a tax levied by the central government on the supply of goods and services within a state in India. It replaces all earlier central indirect taxes such as VAT, service tax and central excise duty, to create a unified tax structure for intrastate<\/p>\n","protected":false},"author":151156614,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3435],"tags":[],"class_list":{"0":"post-11980","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-gst-tax-government"},"_links":{"self":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/11980","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/users\/151156614"}],"replies":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/comments?post=11980"}],"version-history":[{"count":13,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/11980\/revisions"}],"predecessor-version":[{"id":16282,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/11980\/revisions\/16282"}],"wp:attachment":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media?parent=11980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/categories?post=11980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/tags?post=11980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}