GST is not divided between the Union and states by one fixed percentage. For a sale within a state, the tax generally has separate Central GST (CGST) and State GST (SGST) components. For an inter-state sale, the Union collects Integrated GST (IGST), which is later apportioned and transferred under law. The type and location of the supply determine which route applies.
How GST collection is shared: the two routes
| Supply | Tax mechanism | Initial collection and allocation |
|---|---|---|
| Within one state (intra-State) | CGST plus SGST | Central and State components are levied on the same supply. The SGST revenue is for the State Government, as explained by the CBIC GST overview. |
| Between states (inter-State), including imports treated as inter-State for Article 269A | IGST | The Union collects IGST; it is apportioned between the Union and states and transferred under the statutory framework. |
These are distinct collection mechanisms. An intra-State sale is not one tax collected in full by one government and then mechanically divided with the other. An inter-State sale uses IGST first, followed by legal apportionment and accounting.
What happens to GST on a sale within one state?
A taxable intra-State supply carries both a central component, CGST, and a state component, SGST. The CBIC describes the state-side proceeds directly: “The revenue collected under SGST is for State Government.” The applicable tax rates depend on the good or service and the relevant classification and notifications; there is no single rate that applies to every supply.
In practical terms, the invoice may show CGST and SGST as separate amounts. Their presence reflects the dual GST structure for that supply, not a later 50–50 division of a single collected amount.
#1 Best Overall
Who gets the GST collected on an inter-State sale?
For inter-State trade or commerce, Article 269A of the Constitution says GST is levied and collected by the Government of India, then apportioned between the Union and states in the manner Parliament provides by law on the recommendations of the GST Council. The CBIC overview also describes IGST as collected by the Centre and shared under the legal framework.
The Integrated Goods and Services Tax Act sets out apportionment and transfer provisions. IGST credits can be used across relevant tax accounts, so the final settlement is not accurately represented as a fixed split of the gross amount paid at the point of sale. The initial collector and the eventual tax-account allocation are different steps.
How imports fit into the system
Article 269A treats imports as inter-State supplies for its purposes. That brings imports into the IGST framework. This point concerns GST treatment; it does not mean that IGST replaces customs duties.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Why there is no universal Union–state percentage
The amount a state receives depends on the applicable mechanism and statutory accounting, not a single percentage that can be applied to every GST receipt. For an intra-State supply, SGST is the State component. For an inter-State supply, IGST is apportioned and transferred under the law. Neither description supports a claim that the Union and the destination state always divide IGST equally.
Recommended Free Tools
There is also a separate constitutional framework for distribution of certain Union tax proceeds. Article 270 should not be confused with the transaction-level apportionment of IGST. A historical GST Council agenda note discussed how an unsettled IGST balance at a financial year-end might enter the Article 270 process, while amounts already apportioned or cross-utilized were treated differently. That note records an earlier settlement discussion, not a current procedural timetable or a universal formula.
Quick Recap
How to read a GST amount on a transaction
- Check whether the supply is within one state or inter-State. That determines whether the usual structure is CGST plus SGST or IGST.
- Identify the tax head shown. CGST and SGST indicate the dual components used for an intra-State supply; IGST is the tax head for inter-State supplies.
- Do not infer the final government share from the invoice alone. IGST allocation involves statutory apportionment and transfers, and the gross collection figure is not necessarily the amount ultimately retained by the initial collecting government.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
