What is GST?
GST (Goods and Services Tax) is a unified indirect tax levied on the supply of goods and services across India. It replaced a complex structure of multiple taxes - VAT, Service Tax, Excise Duty, and others - when it was introduced on 1st July 2017.
GST follows a destination-based taxation model, meaning the tax is collected at the point of consumption, not production.
Types of GST in India
Collected by Central Government
Applied on: Intra-state transactions
Collected by State Government
Applied on: Intra-state transactions
Collected by Central Government (shared with state)
Applied on: Inter-state transactions
GST Rate Slabs in India (2025)
India has a multi-tier GST rate structure. Items are classified into five slabs:
| GST Rate | Examples |
|---|---|
| 0% | Essential food items, fresh vegetables, milk, eggs, books, newspapers |
| 5% | Packaged food, edible oils, life-saving medicines, coal, transport services |
| 12% | Butter, cheese, fruit juices, mobile phones (some), processed food |
| 18% | Most goods & services - restaurant food, electronics, software, financial services |
| 28% | Luxury items - cars, AC units, tobacco, cement, gaming consoles |
How to Calculate GST - Step by Step
Method 1: Exclusive GST (Adding GST to a price)
Use this when you know the base price (before tax) and want to find the final price.
Final Price = Base Price + GST Amount
Base Price = ₹1,000 | GST Rate = 18%
GST Amount = ₹1,000 × 0.18 = ₹180
Final Price = ₹1,000 + ₹180 = ₹1,180
Method 2: Inclusive GST (Removing GST from a price)
Use this when the price already includes GST and you want to find the base price and tax amount.
GST Amount = GST-inclusive Price − Base Price
GST-inclusive Price = ₹1,180 | GST Rate = 18%
Base Price = ₹1,180 ÷ 1.18 = ₹1,000
GST Amount = ₹1,180 − ₹1,000 = ₹180
Important Things to Remember
Always check the applicable GST rate for your specific product/service on the official GST portal (gst.gov.in) before filing.
If you are a composition scheme taxpayer, your GST rate and filing rules are different - consult a CA.
GST returns must be filed monthly (GSTR-1, GSTR-3B) or quarterly depending on your turnover.
Keep all purchase invoices safe - you need them to claim Input Tax Credit (ITC).
Failure to file GST returns on time attracts a late fee of ₹50/day (₹20/day for nil returns).
Calculate GST Instantly - Free
Stop doing it manually. Use our free GST calculator to add or remove GST from any amount in seconds - no sign-up needed.
Open GST CalculatorFrequently Asked Questions
What is the difference between CGST, SGST, and IGST?
CGST (Central GST) and SGST (State GST) are applied on intra-state transactions - each is half of the total GST rate. IGST (Integrated GST) is applied on inter-state transactions and equals the full GST rate.
What is the formula for GST calculation?
For exclusive (adding GST): GST Amount = Original Price × (GST Rate / 100). For inclusive (removing GST): Original Price = Selling Price / (1 + GST Rate / 100).
Who is required to register for GST?
Businesses with an annual turnover exceeding ₹40 lakh (₹20 lakh for services, ₹10 lakh for special category states) must register for GST.
Can I claim GST input tax credit?
Yes. Registered businesses can claim Input Tax Credit (ITC) for the GST paid on purchases used in the course of business, which reduces the total GST liability.
Is GST charged on exports?
No. Exports are zero-rated under GST. Exporters can claim refunds on GST paid on inputs used to manufacture or provide exported goods/services.