CGST (Central GST)

CGST stands for Central Goods and Services Tax. It is the half of every intra-state GST transaction that goes to the Central Government. The other half goes to the state government as SGST.

India uses a dual GST model. Both the Centre and the state charge tax on the same transaction, but each keeps its own share. CGST is the Centre’s half.

How CGST Works

When a seller and a buyer are in the same state, the transaction is called an intra-state supply. GST is charged on the full value, and the total is split:

• CGST goes to the Centre
• SGST goes to the state government

The split depends on the tax rate set by the GST Council. For an 18% GST transaction, CGST is 9% and SGST is 9%. For a 5% transaction, each is 2.5%.

CGST Rate Structure

The latest GST rates (notified after the 56th GST Council meeting, effective 22 September 2025) are:

Rate	CGST half	What it covers
0%	0%	Fresh produce, milk, bread, eggs
5%	2.5%	Sugar, tea, edible oil, packaged food
18%	9%	Most services, electronics, processed foods
40%	20%	Luxury and sin goods (high-end cars, aerated drinks)

The 12% and 28% rates were abolished on 22 September 2025 and do not apply to any current transaction.

Example of CGST in Action

Suppose a trader in Gujarat sells goods worth Rs 1,00,000 to a buyer in Gujarat. The GST rate is 18% = Rs 18,000 total.

• CGST collected: Rs 9,000 (goes to the Centre)
• SGST collected: Rs 9,000 (goes to Gujarat government)

Both are shown separately on the invoice. The buyer pays Rs 1,18,000 total.

CGST and Input Tax Credit

Businesses that are GST-registered can claim input tax credit (ITC) on the CGST they pay on purchases. The CGST paid on inputs can be set off against CGST collected on sales. This chain prevents double taxation across the supply chain.

For example, a manufacturer buys raw materials and pays CGST of Rs 1,000. Later, she sells finished goods and collects CGST of Rs 2,000. She pays the net CGST of Rs 1,000 to the government after setting off her input credit.

CGST Act

CGST is governed by the Central Goods and Services Tax Act 2017. The CBIC (Central Board of Indirect Taxes and Customs) administers it. Each state has its own SGST Act administered by the state’s commercial tax department.

---

Source: CGST Act 2017; 56th GST Council meeting press release, 3 September 2025.