How GST Is Calculated in India: 5%, 12%, 18%, 28% Rates With Examples

Last updated: June 2026 · Reading time: 9 min · Reviewed for accuracy by the Pixellize editorial team. For filing-specific guidance, always consult a Chartered Accountant.

Whether you’re running a small business, filing a quarterly return, or just curious why a restaurant bill jumped 18%, gst calculation is one of those everyday financial tasks that looks complicated but isn’t. The math is two short formulas. The complexity lives in knowing which slab applies to your goods or service, and whether the sale is intra-state (CGST plus SGST split) or inter-state (full-rate IGST).

This guide breaks down gst calculation across the four main Indian GST slabs (5%, 12%, 18%, 28%) with worked examples for each. You’ll see how to add GST to a base price, how to reverse-calculate the original from an inclusive total, and how the CGST/SGST/IGST split works. If you’d rather skip the math, the free Pixellize GST Calculator does both directions in one paste with the breakdown shown automatically.

Try the GST calculator below

Use the interactive calculator to plug in your own numbers, see the total instantly, and verify the worked examples in this guide. Same tool, same math, no separate tab needed.

What is the GST calculation formula?

The GST calculation formula is: GST Amount = (Original Cost × Rate) / 100, and Total = Original Cost + GST Amount. For a ₹1,000 item at 18% GST, the GST amount is ₹180 and the total payable is ₹1,180. To extract GST from an inclusive total, use Base = Total × 100 / (100 + Rate). The same two formulas cover every rate from 0.25% to 28%.

The four main GST slabs in India

India’s GST Council, chaired by the Union Finance Minister, sets the rates. As of 2026 there are five active slabs (3%, 5%, 12%, 18%, 28%) plus 0% for exempt items and 0.25% for rough diamonds. The four slabs you’ll meet in 95% of transactions are explained below, each with a worked example you can run on the GST calculator to verify (Source: GST Council).

5% slab

Covers household necessities and mass-market essentials: sugar, edible oils, packaged tea and coffee, footwear under ₹1,000, packaged paneer, and economy-class rail tickets. Restaurants without air conditioning charge 5% on food. Branded apparel under ₹1,000 also sits here.

Worked example: A 1 kg packet of branded tea costs ₹500 before tax. GST at 5% is ₹500 × 0.05 = ₹25. The total invoice is ₹525. If the shelf price is already inclusive at ₹525, the base price is ₹525 × 100 / 105 = ₹500, confirming the same numbers in reverse.

12% slab

Mid-range processed and packaged foods, butter, ghee, dry fruits in packaged form, branded namkeen, and certain garments above ₹1,000. Mobile phones moved here in 2020 (previously 18%) to encourage Make-in-India device manufacturing.

Worked example: A smartphone listed at ₹25,000 inclusive of GST. The base price is ₹25,000 × 100 / 112 = ₹22,321.43, and the GST portion is ₹2,678.57. If you’re selling it for ₹22,321 exclusive, the GST you add is ₹22,321 × 0.12 = ₹2,678.52 (tiny rounding difference from inclusive math).

18% slab

The largest slab by volume of transactions. Covers most consumer electronics, kitchen appliances, hair oil, toothpaste, soap, telecom services, financial services, restaurants with air conditioning, and software-as-a-service. Most B2B services sit here too.

Worked example: A SaaS subscription invoiced at ₹10,000 plus GST. GST = ₹10,000 × 0.18 = ₹1,800. Total payable = ₹11,800. The customer pays ₹11,800; the business deposits ₹1,800 to the government on their behalf and claims input tax credit where applicable.

28% slab

Reserved for luxury and demerit goods: passenger vehicles, motorcycles over 350cc, aerated beverages, cigarettes, gutka, premium tobacco, casino entry, IPL tickets. Some categories also attract an additional compensation cess on top of the 28%, pushing effective rates as high as 50% for cigarettes and 65% for premium SUVs.

Worked example: A ₹10,00,000 sedan attracts 28% GST plus a 17% compensation cess. GST = ₹2,80,000. Cess = ₹1,70,000. Final price = ₹14,50,000. The Pixellize GST calculator handles the base 28% rate; cess varies by vehicle category so check the latest CBIC notification.

How to add GST to a base price (exclusive calculation)

Use this when your price is “ex-GST” and you need to invoice the customer the full amount.

1. Identify the GST rate for the goods or service (use the cheat sheet above).
2. Multiply the base price by the rate divided by 100. That is the GST amount.
3. Add the GST amount to the base price. That is the total payable.

Example: A pair of branded shoes priced at ₹3,500 base, taxed at 18%. GST = ₹3,500 × 0.18 = ₹630. Total invoice = ₹4,130. The retailer collects ₹4,130 from the customer and deposits ₹630 with the government via GSTR-3B at month-end.

GST quick lookup: common amounts at each rate

If you don’t want to do the math each time, scan this table for the amount closest to yours. Every cell shows the GST-inclusive total when you add the rate to the base price in the left column.

How do you remove GST from an inclusive price?

To remove GST from an inclusive price, divide the total by (100 + rate) and multiply by 100. The result is the base price. The GST amount is the difference. For a ₹1,180 total at 18% GST, the base is ₹1,180 × 100 / 118 = ₹1,000 and the GST extracted is ₹180. This reverse calculation is essential when you only see the final consumer price.

When does this matter? Most retail invoices show MRP (inclusive) but your books need base + GST separately. The Pixellize GST calculator has a Reverse mode that handles this in one click. For a multi-line invoice, run each line item through the reverse formula and sum.

CGST, SGST, and IGST: how the split works

GST is collected by both the central government and the state government. The split depends on whether the buyer and seller are in the same state.

• Intra-state sale (buyer and seller in the same state): the total GST is split 50/50 into CGST (Central GST) and SGST (State GST). At 18%, that’s 9% CGST + 9% SGST.
• Inter-state sale (buyer and seller in different states): the full GST rate is charged as IGST (Integrated GST). The central government later distributes the state’s share. At 18%, IGST is 18% with no separate CGST or SGST.
• Union Territories: UTGST replaces SGST for sales inside a UT (Chandigarh, Lakshadweep, etc.).

For a ₹1,000 base at 18% GST, an intra-state invoice shows CGST ₹90 + SGST ₹90 = ₹180 total GST. An inter-state invoice for the same goods shows IGST ₹180. The customer pays the same ₹1,180 either way; the difference is which government accounts the tax flows into (Source: CBIC GST portal).

Common mistakes when calculating GST

Five recurring errors that show up in audits and customer disputes:

1. Wrong direction. Treating an inclusive price as exclusive and applying the rate again. A ₹1,180 inclusive invoice does NOT carry ₹212.40 more GST. Always check whether your number is “ex-GST” or “incl-GST” before applying a formula.
2. Wrong slab. The 12% to 18% line trips up retailers most. Branded apparel below ₹1,000 is 5%, above ₹1,000 is 12%. Mobile phones moved from 18% to 12% in 2020. Re-check current GST Council notifications for borderline items.
3. Forgetting cess. The 28% slab often carries an additional compensation cess on luxury items (cigarettes, large cars). The base 28% is only part of the bill.
4. Wrong split for inter-state sales. Charging CGST + SGST on an inter-state shipment results in mismatched returns and rejected input tax credit downstream. Use IGST for inter-state sales without exception.
5. Rounding errors. Going inclusive then exclusive then inclusive again accumulates paise-level discrepancies. For an invoice subtotal, calculate GST on the line items individually and round once at the end.

Beyond the math: 5 things Indian businesses ask next

Once you’ve nailed the calculation, these five follow-up topics come up immediately. Each gets a plain-language answer here.

What is Input Tax Credit (ITC)?

You charge GST when you sell. You also pay GST when you buy raw materials, software, services, or rent. Input Tax Credit lets you subtract the GST you already paid from the GST you owe. If your output GST for the month is ₹10,000 and your input GST was ₹6,000, you only deposit ₹4,000 with the government. You claim ITC each month when you file GSTR-3B (the monthly summary return where you reconcile what you charged versus what you paid).

Do I need GST registration?

Yes, if your annual turnover crosses ₹20 lakh for services or ₹40 lakh for goods (₹10 lakh in special category states like Manipur, Mizoram, Nagaland). Below those, registration is optional. You also must register if you sell inter-state, sell through e-commerce platforms like Amazon or Flipkart, or pay tax under reverse charge. Voluntary registration below the threshold is allowed and often useful for B2B sellers who want to claim ITC.

What is the Composition Scheme?

A simpler tax regime for small businesses with turnover under ₹1.5 crore. Instead of regular GST rates plus monthly returns, you pay a flat rate: 1% for traders, 5% for restaurants, 6% for service providers. The trade-off: you can’t claim Input Tax Credit, you can’t sell inter-state, and you can’t charge GST on your invoices (you absorb the tax from your margin).

What is Reverse Charge Mechanism (RCM)?

Normally the seller charges GST and deposits it. Under RCM, the buyer pays GST directly to the government. This applies when you buy from an unregistered seller, import services from abroad, or receive specific notified services like legal fees from an advocate or goods transport by a transporter. You still claim ITC on the GST you paid under RCM, so the net cost is the same as a regular GST purchase.

What about exports and SaaS sold abroad?

Exports of goods or services are zero-rated under GST. You have two options: export without paying GST using a Letter of Undertaking (LUT, a one-time document you file), or pay GST and claim a refund later. Most SaaS companies and IT exporters use the LUT route to skip the refund-delay cycle. Either way, you don’t ultimately pay any tax on exported revenue, which keeps Indian SaaS globally price-competitive.

Skip the math: use the calculator

Gst calculation reduces to two formulas: multiply for add, divide for remove. The slabs and CGST/SGST/IGST split are what make it feel complex. For one-off calculations, the free Pixellize GST calculator handles both directions, all five slabs, and shows the CGST/SGST/IGST breakdown automatically. For bulk invoice work, set up a spreadsheet template using the formulas above, or check our discount calculator if you also handle pre-tax markdowns.

For the latest rate changes, monitor the GST Council’s quarterly meetings; rates have moved several times since the 2017 launch. The full Pixellize tools directory includes 130+ free utilities for everyday business math, with the same no-signup, browser-only approach.