Place of supply logic
The right tax type for goods and services.
- Your state vs customer state
- Bill-to and ship-to
- Service place of supply
The right tax type, every time
Automatic CGST, SGST and IGST that reads the place of supply so your staff don’t have to
A local sale needs CGST and SGST. A sale to another state needs IGST. A sale to an SEZ needs IGST even if it is next door. Milaan ERP works this out from the customer’s GSTIN and place of supply on every bill, so the tax type is never a guess.
- No credit card needed
- Works for B2B and B2C
- SEZ and export ready
Your business: Bihar (10)
Same item, ₹10,000 at 18%, sold to four customers
Auto split
| Customer | State | Tax charged |
|---|---|---|
| Retailer in PatnaGSTIN starts 10 | Bihar | CGST 900 + SGST 900 |
| Dealer in KolkataGSTIN starts 19 | West Bengal | IGST 1,800 |
| SEZ unit in BiharSupply to SEZInter-state by law | Bihar SEZ | IGST or LUT |
| Walk-in customerNo GSTIN | Bihar | CGST 900 + SGST 900 |
Decided byPlace of supply
Manual choice neededNone
Tax type errors0
Place of supply
GSTIN state code
Checked on every bill
How it works
The tax type depends on where the supply happens
GST has three main parts. CGST goes to the central government and SGST to the state, and both are charged together on sales within the same state. IGST goes to the centre and is charged on sales from one state to another. In union territories without their own legislature, UTGST takes the place of SGST.
Which one applies depends on two things: where you are, and the “place of supply”. For goods, that is usually where the goods are delivered. For most services, it is where the registered customer is located. The first two digits of a GSTIN tell you the state it belongs to, which makes registered customers easy to place.
Milaan ERP compares the two on every bill. Same state: CGST and SGST, each at half the rate. Different state: IGST at the full rate. Supplies to SEZ units and exports are always treated as inter-state, as the law requires, even if the SEZ is in your own state.
Your staff simply choose the customer. The software does the rest, and the right figures flow into your returns.
Common mistakes
Where the tax type goes wrong, and how we prevent it
A wrong tax type can’t simply be adjusted later. It has to be reversed and charged again correctly.
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IGST on a local sale
Staff pick the wrong option, and the customer gets IGST on a sale within the same state.
Picked from place of supply
The software sets the tax type from the customer’s state. There is no option to pick wrongly.
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SEZ treated as local
A supply to an SEZ in your own state is billed with CGST and SGST.
SEZ marked on the customer
Mark a customer as an SEZ unit once. Every bill to them is treated as inter-state.
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Ship-to in another state
Goods are billed to one party and delivered to another in a different state, and the place of supply is missed.
Bill-to and ship-to
Enter both addresses. The place of supply is worked out according to the rules.
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Rate split wrongly
An 18% item is shown as 18% CGST plus 18% SGST on a hand-made bill.
Half and half, always
For local sales, the rate is split equally: 9% plus 9% for an 18% item.
Features
Tax split features built into every bill
Nothing to switch on. It works from the first bill, on every plan.
GSTIN state check
Customer state read from their GSTIN.
- First two digits of GSTIN
- Warns on mismatched address
- Unregistered customers by state
SEZ and exports
Special supplies handled correctly.
- SEZ always inter-state
- With IGST or under LUT
- Export invoices
Union territories
UTGST where it applies.
- UTGST in place of SGST
- Correct state codes
- Right figures in returns
Exact amounts
Rounding and splits done properly.
- Half rate for CGST and SGST
- Line-wise tax
- Rounding as per your setting
Into your returns
Every split lands in the right place.
- GSTR-1 tables
- GSTR-3B summary
- State-wise sales report
Step by step
What happens when you make a bill
Four checks the software does in the time it takes to pick a customer.
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Customer picked Step 1
The customer’s GSTIN and address are loaded. Their state code is read from the first two digits of the GSTIN.
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Place of supply decided Step 2
Delivery address, customer type and supply type (goods, services, SEZ, export) decide the place of supply.
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Tax type set Step 3
Same state as yours: CGST and SGST. Different state, SEZ or export: IGST, or zero-rated under LUT if you export without paying tax.
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Returns updated Step 4
The bill is saved and its figures go into the right tables of GSTR-1 and GSTR-3B.
The rules in brief
CGST, SGST and IGST in plain words
Intra-state supply (supplier and place of supply in the same state): CGST and SGST, each at half the GST rate. Inter-state supply (different states): IGST at the full rate. Supplies to SEZ units or developers and exports are inter-state by law, whatever the location.
Input credit follows a set order too: IGST credit is used first against IGST, then CGST and SGST; CGST credit can’t be used against SGST, or the other way round. Milaan ERP keeps the three separate so your GSTR-3B set-off is clear.
Tip: GST rules change from time to time. This page explains them in simple words; for advice on your own case, please speak to your CA.
- Same stateCGST + SGST (or UTGST), half rate each.
- Different stateIGST at the full rate.
- SEZ and exportsAlways inter-state.
- State codeFirst two digits of the GSTIN.
- Credits kept separateIGST, CGST and SGST tracked on their own.
Pricing
Two simple ways to get started
GST billing and return reports are in every plan; e-invoicing, e-way bills and some advanced features are in the higher plans. Choose cloud to work from anywhere, or offline to keep everything on your own computer.
Offline desktop
from ₹8,999 one-time
Installed on your computer. Works without internet.
- Four plans, single PC to unlimited LAN users
- Data stays on your PC
- Optional yearly support & updates
Online cloud
from ₹12,999 per year
Use it on any computer or phone. Updates and backups included.
- Three plans, from 2 to 10 users
- Mobile app and daily cloud backup
- 14-day free trial
Prices are before 18% GST. Barcode billing, batch tracking, e-invoicing and multi-location features are in the higher plans. Need several users or GSTINs? Ask us for a quote. Compare all plans.
FAQ
Questions about CGST, SGST and IGST, answered.
Can’t find your question here? Message us and a real person will reply.
Talk to our team
Send us a tricky case, like ship-to in another state, and we’ll show you how Milaan ERP handles it.
When is CGST and SGST charged, and when IGST?
CGST and SGST are charged when you and the place of supply are in the same state. IGST is charged when they are in different states, and on SEZ supplies and exports.
How does the software know the customer’s state?
For registered customers, from the first two digits of their GSTIN. For others, from the address on the bill. You can also set the place of supply on a bill when needed.
What about supplies to an SEZ in my own state?
Supplies to SEZ units and developers are treated as inter-state by law. Mark the customer as SEZ once, and the software charges IGST, or treats the bill as zero-rated under LUT if you choose.
What happens in union territories?
In union territories without their own legislature, UTGST is charged in place of SGST. Milaan ERP handles this from the state code.
What if goods are billed to one party and shipped to another?
Enter both bill-to and ship-to addresses. The place of supply is worked out from them according to the rules.
Can I override the tax type on a bill?
You can set the place of supply on a bill if a special case needs it. The tax type then follows from it.
How much does Milaan ERP cost?
The offline desktop plan starts at ₹8,999 as a one-time payment and online cloud plans start at ₹12,999 per year, both before 18% GST. Features such as barcode billing, batch tracking, e-invoicing and multi-location are in the higher plans, so tell us what you need and we’ll suggest the right one. The cloud plans come with a free 14-day trial.
Does it work for services too?
Yes. Services carry SAC codes and the same place-of-supply logic applies.
GST features
More GST features
Never charge the wrong tax type again
Try Milaan ERP for 14 days. We’ll set up your GSTIN and customers so every bill is right from day one.