What is SGST, Meaning, Benefits and Full Form of SGST

SGST – State Goods and Service Tax

Deepshikha Nainani Posted on May 05, 2025

What is SGST?

SGST, or State Goods and Services Tax, is one of the categories of Goods and Services Tax (GST) levied by individual states in India. Considered to be one of the biggest tax reforms in India, GST replaced all the complex state and central government tax procedures and brought a uniform tax regime across India. Although it caused panic and confusion in the initial stages of implementation, the benefits it has since offered has made GST increasingly popular among business owners.

Benefits of SGST for Businesses

There are several benefits which can be availed by a GST-registered business. For starters, a firm that complies with GST norms will stand a better chance at securing a business loan to help with growth/expansion. One can also avail a business loan on Bajaj Markets to avail perks such as flexible repayment tenures, zero collateral, and minimal paperwork. Securing a business loan has never been simpler!

More specifically, the benefits of SGST for business include:

1. Easy Tax Structure: Rather than paying a total of 17 types of taxes, manufacturers and consumers alike simply have to comply with the GST tax laws which can be viewed by clicking on this link.

2. Simple Online Procedure for Filing Tax Returns: The procedure for filing GST returns is very easy and can be taken care of by any computer-savvy business owner.

3. Transparency and Ease of Doing Business: As the tax structure is clearly spelled out, everything is transparent. This reduces red-tapism and scope for corruption and also encourages businesses to pay their taxes honestly.

How is SGST Charged?

Let us assume that a trader from Mumbai sells a desktop computer for ₹30,000 to another trader in Pune. The SGST, in such a scenario, will be 14% while the CGST will be 14% (in Maharashtra). As such, the trader must pay ₹4,200 as SGST and ₹4,200 as CGST.

In case the trader from Pune sells the desktop for ₹50,000 to a trader in Bihar, he charges approximately 28% of the IGST to the latter. This is because it is an inter-state transaction. He charges 28% as IGST on the actual price at which he bought the desktop. That is ₹8,400 on ₹30,000, which is paid to the central government as IGST.

The GST regime has brought about transformative changes in India. Being GST-compliant can make a big difference for a business and can even boost its growth. Moreover, it can help an entrepreneur get access to business loans. With loans available for both MSMEs and start-ups, flexibility and personalisation is the name of the game.