How GST is calculated
GST is charged as a percentage of a product or service's taxable value. There are two directions the calculation runs: adding GST to a base price, and extracting GST that is already contained in a final price. Confusing the two is the single most common source of invoicing errors.
For transactions within a state the total splits into CGST and SGST at half the rate each. For transactions across states the same total is charged as a single IGST. The amount the customer pays is identical — only the split differs.
Worked example
A product with a base price of 10,000 taxed at 18%, shown both ways — adding GST to the base, and extracting GST from an inclusive price.
| Input | Value |
|---|
| Base price | 10,000 |
| GST rate | 18% |
| GST amount | 1,800 |
| Invoice total | 11,800 |
| Intra-state split | CGST 900 + SGST 900 |
| Inter-state | IGST 1,800 |
Reversing it: from an inclusive price of 11,800, the base is 11,800 x 100 / 118 = 10,000 and the GST is 1,800. A frequent error is subtracting 18% from the inclusive price, which gives 9,676 — wrong, because the 18% was charged on the base, not on the total.
How to use this calculator
- Decide whether your figure excludes GST (add it) or includes GST (extract it).
- Enter the amount and select the applicable rate.
- Choose intra-state for the CGST/SGST split or inter-state for IGST.
- Use the base value for your books and the total for what the customer pays.
- Confirm the rate applicable to your specific goods or services before invoicing.
Frequently asked questions
What is the difference between CGST, SGST and IGST?
CGST goes to the central government and SGST to the state, each at half the total rate, on transactions within one state. IGST is a single charge at the full rate on transactions between states, later apportioned between governments. The customer pays the same either way.
How do I remove GST from an inclusive price?
Divide by (100 + rate) and multiply by 100. At 18%, divide the inclusive price by 1.18. Do not simply subtract the percentage from the total — that understates the base value.
What is input tax credit?
A registered business can offset the GST it paid on purchases against the GST it collected on sales, and remit only the difference. This is what prevents tax accumulating at every step of a supply chain.
Which GST rate applies to my product?
Rates are set by category and are revised periodically. Check the current official rate schedule for your HSN or SAC code rather than relying on a remembered figure — misapplying a rate creates a compliance problem.
Is GST charged on the discounted price or the list price?
On the price actually charged after any discount shown on the invoice. Discounts applied after the sale are treated differently and may require a credit note.
This calculator is an educational tool. Results are estimates based on the inputs you provide and do not constitute financial advice. Verify figures with your bank, broker or a qualified advisor before acting on them.