SGST (State GST)

SGST stands for State Goods and Services Tax. It is the half of every intra-state GST transaction that belongs to the state government. Together with CGST (Central GST), it makes up the total GST rate on goods and services sold within a single state.

How SGST Works

India uses a dual GST model. When a transaction happens within one state (called an intra-state supply), the total GST is split:

• CGST (Central GST) goes to the Central Government
• SGST (State GST) goes to the State Government

For a transaction with 18% GST, CGST is 9% and SGST is 9%. For a 5% GST transaction, each is 2.5%.

SGST Rate Structure

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

Rate	SGST half	What it covers
0%	0%	Fresh produce, milk, bread, education, healthcare
5%	2.5%	Sugar, tea, edible oil, passenger transport
18%	9%	Most services, electronics, processed foods
40%	20%	Luxury cars, aerated drinks, sin goods

The 12% and 28% slabs were abolished on 22 September 2025 and no longer apply to any transaction.

SGST vs CGST: An Example

Suppose a trader in Karnataka sells goods worth Rs 50,000 to a buyer in Karnataka. The GST rate is 18%.

• CGST collected: Rs 4,500 (goes to the Centre)
• SGST collected: Rs 4,500 (goes to the Karnataka government)

Both CGST and SGST appear separately on the invoice. The buyer pays Rs 59,000 total.

Input Tax Credit Under SGST

Businesses registered under GST can claim input tax credit on the SGST they pay on purchases. The SGST credit can be used to set off SGST collected on sales, or converted to IGST if goods are sold inter-state.

Within the same state, a business can use its SGST input credit to pay SGST on its outputs. This prevents double taxation in the supply chain.

State GST Acts

Each state has its own SGST Act. Karnataka has the Karnataka Goods and Services Tax Act, Maharashtra has the Maharashtra Goods and Services Tax Act, and so on. The respective state government’s commercial tax department administers the SGST Act in that state.

The CGST Act 2017 is administered by the CBIC (Central Board of Indirect Taxes and Customs).

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Source: CGST Act 2017 and respective State GST Acts; 56th GST Council meeting, 3 September 2025.