How to Calculate GST in India
GST (Goods and Services Tax) replaced multiple indirect taxes in India in 2017. Understanding how to calculate GST is essential for businesses, shopkeepers, and consumers alike.
GST Rate Slabs in India
| GST Rate | Category | Examples |
|---|---|---|
| 0% | Exempt / Essential | Fresh vegetables, milk, eggs, bread |
| 5% | Essential goods | Packaged foods, medicines, coal |
| 12% | Standard goods | Butter, cheese, mobile phones, computers |
| 18% | Standard services | Restaurants, electronics, most services |
| 28% | Luxury/sin goods | Cars, tobacco, aerated drinks, luxury hotels |
Formula: Adding GST to a Price
GST Amount = Original Price × (GST Rate ÷ 100)
Total Price = Original Price + GST Amount
Example: Product costs ₹1,000 with 18% GST:
GST = 1,000 × 18/100 = ₹180 | Total = ₹1,180
Formula: Finding Original Price from GST-Inclusive Price
Original Price = Inclusive Price ÷ (1 + GST Rate/100)
Example: You paid ₹1,180 (GST included at 18%). What's the base price?
Base = 1,180 ÷ 1.18 = ₹1,000 | GST paid = ₹180
CGST, SGST, and IGST
- CGST (Central GST) — Goes to central government. Half of the total GST rate.
- SGST (State GST) — Goes to state government. Other half of GST rate.
- IGST (Integrated GST) — For inter-state transactions. Equal to CGST + SGST combined.
Example: 18% GST on an intra-state sale = 9% CGST + 9% SGST. On inter-state = 18% IGST.
🧾 Quick check: On any GST invoice, verify that Total = Base Amount × (1 + GST%). If the numbers don't match, something may be wrong with the invoice.