Money and tax
How to Calculate GST: Adding, Removing, and the CGST, SGST and IGST Split
By the AllToolsDesk team · Updated
Whether you run a shop, freelance or simply want to know how much tax is inside a price, GST comes down to two calculations and one rule about where the sale happens. This guide covers all three with numbers you can check.
GST rates after September 2025
Since 22 September 2025, most goods and services fall into two main slabs: 5% and 18%. A 40% rate applies to luxury and sin goods such as tobacco products and large cars. Many essentials are exempt. Gold is taxed at 3% and cut and polished diamonds at 0.25%. The earlier 12% and 28% slabs were folded into these.
The rate depends on the item's HSN code (for goods) or SAC code (for services). A calculator can do the arithmetic, but the rate for a particular product has to come from the official rate notifications.
Adding GST to a price
GST amount = price × rate ÷ 100. Total = price + GST.
Example: a service billed at ₹10,000 at 18%. GST = 10,000 × 18 ÷ 100 = ₹1,800. The customer pays ₹11,800.
Removing GST from an inclusive price
A price that already includes GST cannot be reduced by simply taking 18% off; that gives the wrong answer. Divide instead: price before tax = inclusive price ÷ (1 + rate ÷ 100).
Example: an item costs ₹1,180 including 18% GST. 1,180 ÷ 1.18 = ₹1,000 before tax, so the GST inside the price is ₹180. Taking 18% off ₹1,180 would give ₹967.60, which is wrong by ₹32.40.
CGST and SGST, or IGST?
The split depends on the place of supply, not on the rate.
- Seller and place of supply in the same state: the tax is split equally into CGST (to the Centre) and SGST (to the State). On the ₹10,000 example: CGST ₹900 + SGST ₹900.
- Seller and place of supply in different states, or an import: the full tax is IGST. On the same example: IGST ₹1,800.
- In union territories without a legislature, such as Chandigarh or Ladakh, UTGST takes the place of SGST.
The total tax is identical in every case. Only the label and the government that receives it change, which matters for the seller's returns and the buyer's input tax credit.
On an invoice
- Show the taxable value, the rate and the tax for each line or each rate, with CGST and SGST (or IGST) in separate columns.
- Write the HSN or SAC code for each item, and the buyer's GSTIN for business sales.
- Round the final total to the nearest rupee if you wish, and show the round-off as a separate line.
This guide explains the arithmetic. It does not cover cess, reverse charge, composition scheme rates or e-invoicing rules; check those with the GST portal or a tax professional.