{"id":33353,"date":"2026-06-25T17:15:09","date_gmt":"2026-06-25T11:45:09","guid":{"rendered":"https:\/\/blogrevamp.cashfree.com\/?p=33353"},"modified":"2026-06-25T17:15:13","modified_gmt":"2026-06-25T11:45:13","slug":"what-is-cgst-central-goods-and-services-tax","status":"publish","type":"post","link":"https:\/\/blogrevamp.cashfree.com\/what-is-cgst-central-goods-and-services-tax\/","title":{"rendered":"What is CGST? Full Form, How it Works, Key Features, Rates, and Calculation"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-custom 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-6a958831b0df8\" 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: #364250;color:#364250\" 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: #364250;color:#364250\" 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-6a958831b0df8\"  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:\/\/blogrevamp.cashfree.com\/what-is-cgst-central-goods-and-services-tax\/#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:\/\/blogrevamp.cashfree.com\/what-is-cgst-central-goods-and-services-tax\/#How_CGST_Works_in_the_GST_Framework\" >How CGST Works in the GST Framework<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-cgst-central-goods-and-services-tax\/#CGST_vs_SGST_vs_IGST\" >CGST vs SGST vs IGST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-cgst-central-goods-and-services-tax\/#Section_16_of_CGST_Act_%E2%80%93_Eligibility_for_Input_Tax_Credit\" >Section 16 of CGST Act \u2013 Eligibility for Input Tax Credit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-cgst-central-goods-and-services-tax\/#Section_175_of_CGST_Act_%E2%80%93_Blocked_Input_Tax_Credit\" >Section 17(5) of CGST Act \u2013 Blocked Input Tax Credit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-cgst-central-goods-and-services-tax\/#Rule_86B_of_CGST_Rules_%E2%80%93_Restriction_on_ITC_Utilization\" >Rule 86B of CGST Rules \u2013 Restriction on ITC Utilization<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-cgst-central-goods-and-services-tax\/#Section_73_of_CGST_Act_%E2%80%93_Demand_and_Recovery_of_Tax\" >Section 73 of CGST Act \u2013 Demand and Recovery of Tax<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-cgst-central-goods-and-services-tax\/#Why_Understanding_CGST_is_Important_for_Businesses\" >Why Understanding CGST is Important for Businesses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-cgst-central-goods-and-services-tax\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/blogrevamp.cashfree.com\/what-is-cgst-central-goods-and-services-tax\/#FAQs_on_CGST\" >FAQs on CGST<\/a><\/li><\/ul><\/nav><\/div>\n\n<p class=\"wp-block-paragraph\"><strong>Quick Overview of CGST<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>CGST stands for the Central Goods and Services Tax, it is the central tax on intra-state supplies under GST.<\/li>\n\n\n\n<li>CGST is collected by the Central Government and charged along with SGST on local sales.<\/li>\n\n\n\n<li>Eligible businesses can claim Input Tax Credit under Section 16 of CGST Act.<\/li>\n\n\n\n<li>Certain expenses are restricted from ITC under Section 17(5) (blocked credits).<\/li>\n\n\n\n<li>Rule 86B may require businesses to pay at least 1% GST in cash in specified cases.<\/li>\n\n\n\n<li>Understanding CGST is essential to avoid penalties and maintain GST compliance.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_CGST\"><\/span>What is CGST?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">CGST (Central Goods and Services Tax) is the central government share of GST levied on the intra-state supply of goods and services. It is a key component of India&#8217;s GST framework, and was introduced with the implementation of the GST regime in July 2017 to create a unified indirect tax structure.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Whenever a transaction takes place within the same state, GST is split into two equal parts.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>CGST<\/li>\n\n\n\n<li>SGST<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The central government collects the CGST portion, while the respective state government collects SGST. For example, if a product is worth \u20b91,000, it will attract 18% GST on an intra-state sale. The tax here will be divided as follows:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>CGST: 9%<\/li>\n\n\n\n<li>SGST: 9%<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_CGST_Works_in_the_GST_Framework\"><\/span>How CGST Works in the GST Framework<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">India follows a dual GST model. This means that both the Central and State Governments have the authority to levy tax. CGST forms the central component of this structure and works alongside SGST and IGST depending on the nature of the supply. Here are some key points about CGST.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It is collected by the Central Government on intra-state sales.<\/li>\n\n\n\n<li>Businesses can claim credit for the CGST paid on purchases &amp; further use it to offset their CGST liability.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"CGST_vs_SGST_vs_IGST\"><\/span>CGST vs SGST vs IGST<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Parameter<\/strong><\/td><td><strong>CGST<\/strong><\/td><td><strong>SGST<\/strong><\/td><td><strong>IGST<\/strong><\/td><\/tr><tr><td><strong>Levied by<\/strong><\/td><td>Central Government<\/td><td>State Government<\/td><td>Central Government<\/td><\/tr><tr><td><strong>Applicable on<\/strong><\/td><td>Intra-state supply<\/td><td>Intra-state supply<\/td><td>Interstate supply<\/td><\/tr><tr><td><strong>Revenue goes to<\/strong><\/td><td>Centre<\/td><td>State<\/td><td>Centre (later apportioned)<\/td><\/tr><tr><td><strong>ITC utilization<\/strong><\/td><td>Against CGST &amp; IGST<\/td><td>Against SGST &amp; IGST<\/td><td>Against all (as per rules)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding this distinction helps businesses determine <a href=\"https:\/\/www.cashfree.com\/gst-calculator\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">how GST is calculated<\/mark><\/a> and reported in tax returns.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Section_16_of_CGST_Act_%E2%80%93_Eligibility_for_Input_Tax_Credit\"><\/span>Section 16 of CGST Act \u2013 Eligibility for Input Tax Credit<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Section 16 of CGST Act declares all the fundamental rules governing the <a href=\"https:\/\/www.cashfree.com\/blog\/input-tax-credit-gst\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">eligibility &amp; conditions for claiming Input Tax Credit (ITC)<\/mark><\/a>. The act ensures that only authentic business-related taxes paid on purchases can be offset against the net output GST liability.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What does Section 16 Cover?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Under section 16 of CGST act, a registered taxpayer can claim ITC only when specific conditions are fulfilled. The key requirements include the following.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Only a <a href=\"https:\/\/www.cashfree.com\/blog\/gst-registration-online-process-documents\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">GST-registered<\/mark><\/a> person is eligible to claim ITC.<\/li>\n\n\n\n<li>The claimant must hold a valid tax invoice, debit note, or prescribed document issued by a registered supplier.<\/li>\n\n\n\n<li>ITC can be claimed only after the goods or services are actually received.<\/li>\n\n\n\n<li>The supplier must have deposited the tax with the government.<\/li>\n\n\n\n<li>The recipient must file the required <a href=\"https:\/\/www.cashfree.com\/blog\/gst-return-filing\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">GST returns<\/mark><\/a> (primarily GSTR-3B).<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Proper compliance with Section 16 is important to avoid ITC reversals, interest, &amp; penalties.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>To remain compliant with Section 16, businesses should closely monitor the following rules.<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>ITC must be claimed within the prescribed deadline, generally by 30 November of the following financial year.<\/li>\n\n\n\n<li>ITC should match with supplier filings (GSTR-2B reconciliation is essential).<\/li>\n\n\n\n<li>If payment to the supplier is not made within 180 days from the invoice date, the claimed ITC must be reversed along with interest.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Section_175_of_CGST_Act_%E2%80%93_Blocked_Input_Tax_Credit\"><\/span>Section 17(5) of CGST Act \u2013 Blocked Input Tax Credit<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">ITC is not allowed on all types of business expenses, and Section 17(5) of the CGST Act specifies these categories of expenses. Known as blocked credits, understanding these restrictions is crucial to prevent wrongful ITC claims &amp; potential GST notices.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What is Blocked Credit?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Blocked credit refers to input tax credit that businesses are legally prohibited from claiming, even if <a href=\"https:\/\/www.cashfree.com\/blog\/what-is-gst-goods-and-service-tax\/\" type=\"link\" id=\"https:\/\/www.cashfree.com\/blog\/what-is-gst-goods-and-service-tax\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">GST<\/mark><\/a> has been paid on the purchase. The government restricts certain ITC claims to prevent misuse and to ensure that personal or non-business expenses do not reduce tax liability.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>List of Major Blocked Credits<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Motor vehicles with a seating capacity&nbsp;&nbsp;(including driver) &lt;= 13, except when used for specified purposes like transportation of passengers, goods, or training.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Personal consumption goods and services<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Memberships in clubs, health, and fitness centers<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Works contract services for the construction of immovable property (with exceptions)<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Employee-related benefits such as food and beverages, travel benefits, and insurance.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Rule_86B_of_CGST_Rules_%E2%80%93_Restriction_on_ITC_Utilization\"><\/span>Rule 86B of CGST Rules \u2013 Restriction on ITC Utilization<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Rule 86B of CGST Rules is a compliance rule that limits how much Input Tax Credit (ITC) a business can use to pay its GST liability. It was introduced to stop fake invoicing and fraudulent ITC claims.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Businesses can use ITC to pay almost all their GST. But under Rule 86B, certain taxpayers must pay at least 1% of their output GST in cash, even if they have enough ITC available. This means ITC can be used for only up to 99% of the GST liability in applicable cases.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">When Does Rule 86B Apply?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Rule 86B applies if:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Your taxable sales exceed \u20b950 lakh in a month (excluding exempt and zero-rated supplies)<\/li>\n\n\n\n<li>You do not fall under the exemption categories.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Section_73_of_CGST_Act_%E2%80%93_Demand_and_Recovery_of_Tax\"><\/span>Section 73 of CGST Act \u2013 Demand and Recovery of Tax<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">In CGST, there can be cases where tax has been short-paid, not paid, or ITC has been wrongly availed without any element of fraud, wilful misstatement, or suppression of facts. Section 73 of CGST Act deals with it. The act provides a structured mechanism for tax authorities to recover dues in genuine error cases.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Purpose of Section 73<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The primary objective of section 73 of CGST act is to address bona fide mistakes such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Calculation errors<\/li>\n\n\n\n<li>Incorrect ITC claims due to oversight<\/li>\n\n\n\n<li>Misinterpretation of provisions<\/li>\n\n\n\n<li>Clerical mistakes in returns<\/li>\n\n\n\n<li>It ensures fair treatment where there is no intent to evade tax.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Key Provisions<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Important aspects of Section 73 include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A proper officer must issue a show cause notice (SCN) to the taxpayer.<\/li>\n\n\n\n<li>Notice generally must be issued within the prescribed limitation period (typically 3 years from the due date of the annual return).<\/li>\n\n\n\n<li>Interest is payable; penalty is generally lower compared to fraud cases. 10% of the tax amount or \u20b910,000, whichever is higher.<\/li>\n\n\n\n<li>Taxpayers can pay tax and interest before or after notice to reduce or avoid penalties.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Understanding_CGST_is_Important_for_Businesses\"><\/span>Why Understanding CGST is Important for Businesses<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Running a business becomes way easier when you are on top of understanding your tax liabilities. The same is the case with CGST.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Increased GST scrutiny:<\/strong> Every tax authority today uses advanced analytics to closely monitor <a href=\"https:\/\/www.cashfree.com\/blog\/gst-return-filing\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">GST filings<\/mark><\/a> &amp; ITC claims.<\/li>\n\n\n\n<li><strong>Automated compliance systems:<\/strong> Tech-driven checks reduce manual errors, but they also quickly flag discrepancies.<\/li>\n\n\n\n<li><strong>E-invoicing expansion:<\/strong> The recent changes in the tax rules have pushed more businesses under mandatory e-invoicing category, enabling real-time transaction tracking.<\/li>\n\n\n\n<li><strong>Data matching by GSTN:<\/strong> Save time in data matching as automated reconciliation detects invoices &amp; returns mismatches quicker.<\/li>\n\n\n\n<li><strong>Higher penalty risks:<\/strong> Today, even the small compliance mistakes can lead to notices, ITC reversals, or penalties.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">If you are an Indian business that deals in most of its sales within the state, understanding what is CGST is necessary for you. With proper knowledge of section 17(5) of CGST act, rule 86b of CGST rules, section 16 of CGST act, etc., you can gain several benefits on your overall GST. Make sure that you keep all the minor details in check, as missing any one of them can lead to severe penalties.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">GST compliance isn\u2019t just about knowing the rules today. As scrutiny around GST increases, businesses face stricter reporting requirements and automated reconciliation. In this scenario, businesses need a system that will help them maintain accurate financial records and track transactions seamlessly.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Platforms like <a href=\"https:\/\/www.cashfree.com\/\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">Cashfree Payments<\/mark><\/a> help businesses streamline financial workflows with automated reconciliation, real-time payment tracking, and improved transaction visibility, making compliance management easier.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/merchant.cashfree.com\/merchants\/signup?source-action=Blog&amp;action=Sign%20Up&amp;button-id=StartNow_BlogFooterCTA\"><img data-recalc-dims=\"1\" fetchpriority=\"high\" decoding=\"async\" width=\"770\" height=\"107\" data-attachment-id=\"33371\" data-permalink=\"https:\/\/blogrevamp.cashfree.com\/what-is-cgst-central-goods-and-services-tax\/image-94\/\" data-orig-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2026\/03\/image.png?fit=1024%2C142&amp;ssl=1\" data-orig-size=\"1024,142\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"image\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2026\/03\/image.png?fit=770%2C107&amp;ssl=1\" src=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2026\/03\/image.png?resize=770%2C107&#038;ssl=1\" alt=\"\" class=\"wp-image-33371\" srcset=\"https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2026\/03\/image.png?w=1024&amp;ssl=1 1024w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2026\/03\/image.png?resize=300%2C42&amp;ssl=1 300w, https:\/\/i0.wp.com\/blogrevamp.cashfree.com\/wp-content\/uploads\/2026\/03\/image.png?resize=768%2C107&amp;ssl=1 768w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs_on_CGST\"><\/span>FAQs on CGST<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>What is the Full Form of CGST?<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The CGST full form is Central Goods and Services Tax. It is the central component of GST, levied by the Central Government on intra\u2011state transactions of goods and services.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>What are the differences between CGST and SGST?<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">SGST is levied and collected by the state on intra-state transactions and CGST is collected by the central government on instra-state supplies. The difference is who takes the proceedings from tax collections as half goes to the centre and the other half goes to the State.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>What are the four types of GST?<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Under the GST regime, the four types of taxes include Central GST (CGST), State GST (SGST), Integrated GST (IGST), Union Territory GST (UTGST).&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>What is Section 16 of CGST Act?<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Section 16 of CGST Act defines the conditions for claiming Input Tax Credit (ITC). Businesses can claim ITC only if they hold valid invoices, receive goods or services, and file GST returns.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>What is Section 17(5) of CGST Act?<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Section 17(5) specifies blocked credits, which are purchases where ITC cannot be claimed, such as club memberships, personal consumption, and certain motor vehicles.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>What is Section 73 of CGST Act?<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Section 73 deals with tax demand and recovery when short payment occurs without fraud or intentional evasion, such as clerical mistakes or incorrect tax calculations.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>In case you missed it:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-1\"><a href=\"https:\/\/www.cashfree.com\/blog\/what-is-gst-goods-and-service-tax\/\" target=\"_blank\" rel=\"noreferrer noopener\">What is GST, Full Form, Meaning &amp; Key Features<\/a><\/li>\n\n\n\n<li class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-2\"><a href=\"https:\/\/www.cashfree.com\/blog\/gst-login-password-portal-guide\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to Access GST Portal<\/a><\/li>\n\n\n\n<li class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-3\"><a href=\"https:\/\/www.cashfree.com\/blog\/gst-registration-online-process-documents\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to Apply for GST Number, Process &amp; Documents<\/a><\/li>\n\n\n\n<li class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-4\"><a href=\"https:\/\/www.cashfree.com\/blog\/gst-rules-regulations\/\">GST Rules &amp; Regulations in India 2026<\/a><\/li>\n\n\n\n<li class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-5\"><a href=\"https:\/\/www.cashfree.com\/blog\/eway-bill-online-generation\/\">How to Generate E-Way Bill Online<\/a><\/li>\n\n\n\n<li class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-6\"><a href=\"https:\/\/www.cashfree.com\/blog\/msme-registration-india-process-certificate-eligibility\/\" target=\"_blank\" rel=\"noreferrer noopener\">MSME Registration in India<\/a><\/li>\n\n\n\n<li class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-7\"><a href=\"https:\/\/www.cashfree.com\/blog\/gstr-1-due-date-filing-process\/\">What is GSTR-1?<\/a><\/li>\n\n\n\n<li class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-8\"><a href=\"https:\/\/www.cashfree.com\/blog\/gst-state-code-list\/\" target=\"_blank\" rel=\"noreferrer noopener\">GST State Code List \u2013 All States &amp; UT Codes<\/a><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Quick Overview of CGST What is CGST? CGST (Central Goods and Services Tax) is the central government share of GST levied on the intra-state supply of goods and services. It is a key component of India&#8217;s GST framework, and was introduced with the implementation of the GST regime in July 2017 to create a unified<\/p>\n","protected":false},"author":142,"featured_media":33373,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_themeisle_gutenberg_block_has_review":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[9970],"tags":[],"class_list":["post-33353","post","type-post","status-publish","format-standard","has-post-thumbnail","category-gst"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What is CGST? Full Form, Meaning, Rates, Rules, &amp; Key Sections<\/title>\n<meta name=\"description\" content=\"Learn what CGST is, full form, how it works, and key CGST Act provisions like Section 16, Section 17(5), Rule 86B, and Section 73.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.cashfree.com\/blog\/what-is-cgst-central-goods-and-services-tax\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is CGST? 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Full Form, Meaning, Rates, Rules, & Key Sections","description":"Learn what CGST is, full form, how it works, and key CGST Act provisions like Section 16, Section 17(5), Rule 86B, and Section 73.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.cashfree.com\/blog\/what-is-cgst-central-goods-and-services-tax\/","og_locale":"en_US","og_type":"article","og_title":"What is CGST? 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