GST Calculator
What is GST?
GST, or Goods and Services Tax, is a comprehensive indirect tax levied on the manufacture, sale, and consumption of goods and services throughout India. Introduced on 1 July 2017, it replaced a fragmented system of central and state taxes — including Central Excise Duty, Service Tax, VAT, and several others — with a single unified tax structure that applies across the entire country.
GST is a destination-based tax: the tax revenue goes to the state where the goods or services are finally consumed, not where they were produced. This made India's indirect taxation system more equitable and eliminated the cascading "tax on tax" effect that drove up costs under the old regime.
GST is structured as a dual tax. When goods or services are supplied within a state (intra-state), both the central government (CGST) and the state government (SGST) each collect half of the applicable GST rate. When goods or services are supplied across state lines (inter-state), a single tax called IGST is collected by the central government and later distributed to the destination state.
GST Formula
The two core calculations you will use are exclusive GST (adding GST to a price) and inclusive GST (extracting GST from a price that already includes it).
Exclusive (Add GST):
GST Amount = Base Amount × (GST Rate / 100)
Total Amount = Base Amount + GST Amount
Inclusive (Remove GST):
Original Amount = Inclusive Price / (1 + GST Rate / 100)
GST Amount = Inclusive Price − Original Amount
CGST, SGST, and IGST Explained
Understanding the three components of GST is important for businesses filing returns and claiming input tax credit (ITC).
| Component | Full Form | When Applied | Rate (for 18% GST) | Goes To |
|---|---|---|---|---|
| CGST | Central GST | Intra-state supply | 9% | Central Govt |
| SGST | State GST | Intra-state supply | 9% | State Govt |
| IGST | Integrated GST | Inter-state supply / imports | 18% | Central Govt (then to destination state) |
A business can offset CGST collected with CGST paid, and SGST collected with SGST paid. IGST paid can be offset against IGST, CGST, or SGST liability in that order. This prevents double taxation and keeps cash flow manageable.
GST Rate Slabs in India
India uses a tiered GST rate structure. Most goods and services fall into one of four main slabs, though special rates apply for certain categories.
| GST Rate | CGST | SGST / UTGST | Examples |
|---|---|---|---|
| 0% | 0% | 0% | Fresh milk, vegetables, cereals (unpackaged), healthcare services, education |
| 5% | 2.5% | 2.5% | Packaged food, life-saving drugs, economy class air travel, rail travel (AC) |
| 12% | 6% | 6% | Processed foods, textiles, mobile phones, business class air travel, fertilizers |
| 18% | 9% | 9% | Most services, electronics, capital goods, restaurant dining, hotel stays (₹1,000-₹7,500/night) |
| 28% | 14% | 14% | Automobiles, luxury goods, aerated drinks, tobacco, online gaming, casinos |
Special rates: 3% on gold, silver, and processed diamonds; 0.25% on rough/semi-precious stones. Petroleum products (petrol, diesel, ATF) are currently outside GST and continue to be taxed under the old regime.
What is an HSN Code?
HSN stands for Harmonized System of Nomenclature — an internationally standardized system for classifying goods. India follows an 8-digit HSN code structure. Businesses with turnover above ₹5 crore must quote the 6-digit HSN code on all B2B invoices. Businesses with turnover between ₹1.5 crore and ₹5 crore must use 4-digit codes. Businesses below ₹1.5 crore are exempt from quoting HSN codes but may choose to do so for clarity.
For services, the equivalent is SAC (Services Accounting Code), also a 6-digit code. All service providers must quote the SAC code on their invoices. The correct HSN or SAC code determines which GST rate applies and is critical for claiming input tax credit.
Input Tax Credit (ITC)
One of GST's most significant benefits is the seamless Input Tax Credit mechanism. If you are a registered GST taxpayer, you can offset the GST you paid on your purchases (inputs) against the GST you collect on your sales (outputs). You only pay GST on the value you add, not the full transaction value.
For example: A manufacturer buys raw materials worth ₹10,000 and pays 18% GST = ₹1,800. The manufacturer sells finished goods for ₹15,000 and collects 18% GST = ₹2,700. Net GST payable = ₹2,700 - ₹1,800 = ₹900 only. The ₹1,800 already paid is credited, eliminating the cascading effect.
Frequently Asked Questions
What is GST and how is it calculated?
GST (Goods and Services Tax) is a single indirect tax applied on the supply of goods and services in India. To calculate GST, multiply the base amount by the applicable rate percentage. For example, on a product worth ₹1,000 at 18%, the GST amount is ₹180 and the total invoice value is ₹1,180.
What is the difference between CGST, SGST, and IGST?
CGST (Central GST) and SGST (State GST) apply together on intra-state transactions — each gets half of the total GST rate. So for 18% GST on a local transaction, CGST = 9% and SGST = 9%, both collected by their respective governments. IGST (Integrated GST) applies on inter-state transactions or imports, at the full rate, and is collected by the central government before being apportioned to the destination state.
What are the current GST slabs in India?
India has four main GST rate slabs: 5% (essential goods like packaged food, transport services), 12% (processed foods, textiles, business class air travel), 18% (most services, electronics, capital goods), and 28% (luxury goods, automobiles, tobacco, aerated drinks). Some goods like fresh produce, milk, and curd attract 0% (exempt). Special rates of 0.25% apply to rough diamonds and 3% to gold.
How do I calculate GST when the price is already inclusive of GST?
Use the reverse/inclusive GST formula: Original Price = Total Price / (1 + GST Rate/100). For example, if an item is priced at ₹1,180 inclusive of 18% GST: Original = ₹1,180 / 1.18 = ₹1,000. The GST embedded in the price = ₹1,180 - ₹1,000 = ₹180. This is useful when you want to know the base price or claim input tax credit.
What is the GST registration threshold limit?
Businesses with aggregate annual turnover exceeding ₹40 lakh (for goods) or ₹20 lakh (for services) in most states must register for GST. The threshold is ₹10 lakh for special category states in the North-East and hilly regions. Regardless of turnover, businesses engaged in inter-state supply of goods must mandatorily register. E-commerce operators, casual taxable persons, and those making supplies under reverse charge mechanism also need mandatory registration.
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