How to Calculate GST in India

Goods and Services Tax replaced a tangle of central and state levies in India in 2017. The arithmetic behind it is simple, but one particular calculation trips up shopkeepers, freelancers and finance teams alike: working backwards from a price that already includes the tax.

Adding GST to a price

If you have a base price and need the final invoice value, multiply by the rate and add it on.

A consultancy fee of ₹50,000 at the 18% rate attracts ₹9,000 of GST, giving an invoice total of ₹59,000. At 5% the same fee would carry ₹2,500 of tax; at 28%, ₹14,000.

Removing GST from an inclusive price

This is the one that goes wrong. If a product retails at ₹1,180 including 18% GST, the tax component is not 18% of ₹1,180.

The tax was calculated on the base price, so you have to reverse that relationship rather than subtract the percentage:

• Correct: 1180 ÷ 1.18 = ₹1,000 base, ₹180 GST
• Wrong: 1180 − 18% = ₹967.60

The wrong method overstates the tax by ₹32.40 on a single ₹1,180 sale. The gap widens as the rate rises, because the percentage is being taken from an increasingly inflated figure. At 28%, reverse-calculating a ₹1,280 sale by subtraction is out by more than ₹78.

Repeated across a month of transactions, an error of that shape distorts your input tax credit and your books. It is also the reason so many people go looking for a reverse GST calculator in the first place.

The general rule

To strip tax from any inclusive amount, divide by one plus the rate expressed as a decimal. For 5% divide by 1.05, for 12% by 1.12, for 18% by 1.18 and for 28% by 1.28.

CGST, SGST and IGST

The total tax is identical whichever applies. Only the way it is split, and the way it appears on your invoice, changes.

1. Within a state — the tax is divided equally between Central GST and State GST. An 18% supply shows as 9% CGST plus 9% SGST.
2. Between states — the whole amount is charged as Integrated GST on a single line, and is later apportioned between the centre and the destination state.

A common misconception is that inter-state supply is somehow taxed more heavily. It is not. ₹9,000 of GST on a ₹50,000 invoice is ₹9,000 whether it appears as one IGST line or as two lines of ₹4,500.

Current GST slabs

These are indicative. The rate that applies to any particular item depends on its HSN code for goods or SAC code for services, and the GST Council revises the schedule from time to time. Items do move between slabs, so check the notified rate for your code rather than relying on a general table.

What this calculator does not cover

Some goods in the 28% band also attract a compensation cess — cars, tobacco and aerated drinks among them. Cess sits on top of GST, varies by item, and is not included in these figures. If your product attracts it, add it separately.

A worked example

A designer in Maharashtra invoices a client in Maharashtra ₹80,000 for services at 18%.

• GST = 80,000 × 0.18 = ₹14,400
• CGST = ₹7,200, SGST = ₹7,200
• Invoice total = ₹94,400

Had the client been in Karnataka, the same invoice would show a single IGST line of ₹14,400 and the same ₹94,400 total.

Now suppose the designer had quoted ₹94,400 as an all-inclusive figure and needed to know the fee behind it. Dividing by 1.18 returns the ₹80,000 base and ₹14,400 of tax. Subtracting 18% would have given ₹77,408 — an error of nearly ₹2,600 on one invoice.

Try it

The GST calculator does all of this as you type, in both directions, with the CGST and SGST split worked out for you. Like everything here it runs in your browser, so the figures never leave your device.

This page explains how the arithmetic works. It is not tax advice, and it cannot tell you which rate applies to your business — see ourdisclaimer.