Quick Summary
- To add GST: Total = Price × (1 + rate/100)
- To remove GST: Original = Inclusive price ÷ (1 + rate/100)
- Intra-state: CGST + SGST (each = rate/2). Inter-state: IGST (full rate)
- GST slabs: 0%, 3%, 5%, 12%, 18%, 28%
What is GST?
GST (Goods and Services Tax) is India's unified indirect tax that replaced VAT, service tax, excise duty, and several other taxes. Introduced on 1 July 2017, it follows a dual structure: the Centre collects CGST and states collect SGST on intra-state transactions. For inter-state sales, IGST (collected by Centre and shared with states) applies.
The 5 GST Slabs
| Rate | What it covers |
|---|---|
| 0% | Fresh produce, milk, eggs, cereals, healthcare services, education |
| 3% | Gold, silver, precious stones, diamonds |
| 5% | Edible oils, sugar, spices, tea, coffee, household necessities, coal |
| 12% | Processed food, computers, medicines, mobile phones, business class air travel |
| 18% | Most services (banking, IT, telecom, insurance), AC restaurants, capital goods |
| 28% | Luxury goods: cars, ACs, large TVs, tobacco, aerated drinks, pan masala |
How to Add GST to a Price
Use this when you know the base price (excluding GST) and want the final price:
GST Amount = Original Price × Rate ÷ 100
Total Price = Original Price + GST Amount
= Original Price × (1 + Rate ÷ 100)
Example 1 — Adding 18% GST
A software service costs ₹50,000 (excl. GST). GST rate = 18%.
- GST Amount = ₹50,000 × 18 ÷ 100 = ₹9,000
- Total Invoice = ₹50,000 + ₹9,000 = ₹59,000
- CGST (9%) = ₹4,500 | SGST (9%) = ₹4,500
How to Remove GST from an Inclusive Price
Use this when the price already includes GST (e.g., MRP on a product) and you need the base price:
Original Price = Inclusive Price ÷ (1 + Rate ÷ 100)
GST Amount = Inclusive Price − Original Price
Example 2 — Removing 12% GST
A medicine's MRP is ₹1,120 (inclusive of 12% GST).
- Original Price = ₹1,120 ÷ 1.12 = ₹1,000
- GST Amount = ₹1,120 − ₹1,000 = ₹120
- CGST (6%) = ₹60 | SGST (6%) = ₹60
CGST vs SGST vs IGST — What's the Difference?
Every GST transaction is split between central and state governments. Which tax applies depends on whether the transaction is within a state (intra-state) or across states (inter-state).
| Tax | When | Rate | Who collects |
|---|---|---|---|
| CGST | Intra-state sale | GST Rate ÷ 2 | Central Government |
| SGST | Intra-state sale | GST Rate ÷ 2 | State Government |
| IGST | Inter-state sale / import | Full GST Rate | Central Govt (shared with state) |
Example 3 — IGST on inter-state sale
A Delhi supplier sells ₹1,00,000 of goods to a Mumbai buyer. GST rate = 18%.
- Since this is inter-state, IGST applies (not CGST + SGST)
- IGST = ₹1,00,000 × 18% = ₹18,000
- Total invoice = ₹1,18,000
Input Tax Credit (ITC) — Why GST Isn't Double Taxation
Businesses can claim credit for GST they paid on purchases (inputs) and set it off against the GST they collect on sales (output). Only the net difference goes to the government.
ITC Example
- You buy raw materials and pay ₹5,400 in GST (Input)
- You manufacture and sell products, collecting ₹9,000 in GST (Output)
- Net GST payable = ₹9,000 − ₹5,400 = ₹3,600
Common GST Mistakes to Avoid
- Applying the wrong slab. Always check the HSN/SAC code for your specific product or service. Many goods have been moved between slabs since 2017.
- Treating MRP as base price. MRP always includes GST. Use the reverse formula to get the base price.
- Missing ITC claims. Businesses often miss legitimate ITC on business-use purchases. Maintain proper invoices.
- Intra vs inter-state confusion. Applying IGST on a local sale (or CGST+SGST on an interstate sale) is a compliance error that attracts penalties.
Use Our Free GST Calculator
Skip the manual math. Our GST calculator handles all three modes — add GST, remove GST, and get the CGST/SGST/IGST split — instantly for any slab.
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Add GST, remove GST, get CGST/SGST split — for all 5 slabs instantly.
Open GST CalculatorFrequently Asked Questions
Is GST applicable on exports?
No. Exports are zero-rated under GST. The exporter can claim a refund of any GST paid on inputs used to make the exported goods/services.
Can a consumer claim GST refund?
Generally no. End consumers cannot claim ITC or refunds. Only GST-registered businesses in the supply chain can claim ITC. However, if you are charged GST on an exempt item, you can raise a complaint with the anti-profiteering authority.
What is the GST Composition Scheme?
Small businesses with turnover under ₹1.5 Crore (₹75L for services) can pay a flat GST rate (1–5%) quarterly instead of the standard monthly filing. They cannot claim ITC or charge GST separately on invoices.
What is an HSN code?
Harmonised System of Nomenclature (HSN) is an internationally accepted product classification code used to determine the GST rate applicable to a specific good. SAC (Services Accounting Code) is the equivalent for services.