How GST is calculated
There are only two sums to know. Which one you need depends on whether your price already includes GST.
Adding GST to a price that doesn't include it
GST = Price × Rate ÷ 100Total = Price + GSTExample: an item priced at ₹1,000 before tax, at 18%. GST = 1,000 × 18 ÷ 100 = ₹180, so the bill total is ₹1,180.
Taking GST out of a price that includes it
Price without GST = Total × 100 ÷ (100 + Rate)GST = Total − Price without GSTExample: a quoted price of ₹1,180 “inclusive of all taxes” at 18%. 1,180 × 100 ÷ 118 = ₹1,000, so the GST inside it is ₹180. You need this sum whenever a customer asks for a bill at a fixed final price.
CGST + SGST or IGST?
The total tax is the same either way. What changes is who receives it and how it is shown on the bill.
- Buyer in your own state (intra-state sale): split the rate in half — CGST goes to the Centre and SGST (UTGST in a Union Territory) to the state. 18% becomes 9% CGST + 9% SGST.
- Buyer in another state (inter-state sale): charge the full rate as IGST — 18% IGST.
For goods, the state where the delivery ends usually decides it; for services to a registered business, it is usually the buyer's registered location. When in doubt, ask your CA — tax paid under the wrong head has to be paid again under the right one, and the wrong one claimed back as a refund.
Why the paisa matters
Each tax is rounded to the paisa on its own. Take ₹999 including 18% for a local buyer: the calculator shows ₹846.62 + ₹76.19 CGST + ₹76.19 SGST = ₹999.00. CGST and SGST are always equal and the parts always add back to the exact total — something spreadsheet formulas that round each cell differently often get wrong.
GST rates after 22 September 2025 (GST 2.0)
From 22 September 2025 the GST Council replaced the old 5 / 12 / 18 / 28% structure with two main rates and one special rate:
| Rate | Used for |
|---|---|
| 0% (nil or exempt) | Many unprocessed foods, essentials and some services |
| 5% | Merit rate — many daily-use goods and some services |
| 18% | Standard rate — most other goods and services |
| 40% | Special rate — a short list of luxury and sin goods |
| 3% and 0.25% | Gold, silver and jewellery (3%); rough and semi-processed diamonds and precious stones (0.25%) |
| 12% and 28% | Old slabs — only for invoices dated before 22 September 2025 |
Most items that were at 12% moved to 5%, and most at 28% moved to 18% — but not all, and a few products stayed on their old rate plus compensation cess for a while. Always check the rate for your item's HSN or SAC code on the CBIC website or with your accountant before you bill.
Common mistakes
- Taking 18% of an inclusive price. 18% of ₹1,180 is ₹212.40, but the GST inside ₹1,180 is only ₹180. Use the remove-GST formula.
- Charging IGST on a local sale, or CGST + SGST on an out-of-state sale.
- Using an old 12% or 28% rate on a new invoice dated after 22 September 2025.
- Working out GST before a discount that is shown on the bill. A discount on the invoice reduces the taxable value, so GST is charged on the discounted price.
- Rounding CGST and SGST separately in a way that makes the halves differ, or the total come out a paisa off.