IGST (Integrated Goods and Services Tax)

IGST (Integrated Goods and Services Tax) is charged when the supplier and the recipient are in different states, or when goods/services are imported into India. It's the full GST rate applied as a single tax — unlike intra-state transactions where the same rate is split into CGST and SGST.

For a service taxed at 18%: if your client is in another state, you charge 18% IGST. If they're in your state, you charge 9% CGST + 9% SGST. The total tax amount is the same. The difference is administrative — IGST goes to the central government, which then settles the destination state's share.

For freelancers, the IGST vs CGST+SGST determination is based on "place of supply." For services, the default place of supply is the location of the recipient. Check the state code in your client's GSTIN — if it's different from yours, charge IGST.

Export of services (billing foreign clients) is treated as inter-state supply and technically falls under IGST. However, with a Letter of Undertaking (LUT), you can zero-rate the IGST — charging 0% while still claiming input tax credit on your business expenses.

Getting this wrong is one of the most common GST invoicing mistakes. Charging CGST+SGST on an inter-state supply (or vice versa) creates compliance issues and ITC problems for your client. Double-check the state codes before issuing every invoice.