CGST, SGST, and IGST: which applies to your invoice

The rule sounds simple and is still the single most common error on freelance invoices: it depends on the place of supply, which for services is normally the location of the client, not your own registered address.

Same state, split tax

If your client is registered in the same state as your business, the tax splits evenly into CGST and SGST. An 18% rate becomes two lines of 9% each, both payable, adding up to the same total — this is purely a reporting split between central and state government, not an extra charge.

Different state, single IGST line

If the client is registered in a different state, the entire amount is charged as IGST at the full rate, as one line rather than two. Mixing this up — charging CGST and SGST to an out-of-state client, or IGST to one in your own state — is a common rejection reason during a client review or your own filing.

Where people get it wrong

• Assuming the split follows your location rather than the clients
• Not checking the GSTIN state code before generating the invoice
• Leaving the tax type to manual selection instead of letting the tool detect it

This is not legal advice, and specific transactions can have exceptions. Letting your invoicing tool detect the split from the GSTIN removes the guesswork on every invoice rather than just the ones you remember to double-check.

Paxbil detects the CGST, SGST, or IGST split automatically from the GSTIN — see how GST invoicing works on Paxbil