Indian GST Calculation: Rules, Slabs & Formula
Key Takeaway
To calculate GST in India: for exclusive tax, GST Amount = (Base Price x GST%) / 100. For inclusive tax, Base Price = Total Price / (1 + GST% / 100), and the GST portion is Total Price - Base Price.
The Goods and Services Tax (GST) is a unified indirect tax system in India implemented in 2017 to eliminate tax cascading. It replaces legacy taxes like excise duty, service tax, VAT, and octroi.
GST Tax Slabs in India
Indian goods and services are classified under five primary tax slabs set by the GST Council:
- 0% (Exempt): Unprocessed food grains, milk, fresh vegetables, and essential services.
- 5%: Household necessities, coal, lifesavers, and economy class air travel.
- 12%: Processed foods, computers, smartphones, and business services.
- 18%: Professional IT services, restaurants, luxury hair salons, capital goods (most common slab).
- 28%: Demerit goods, luxury cars, tobacco, cement, and high-end consumer appliances.
Intra-State vs Inter-State Calculations
GST is divided depending on the origin and destination of transactions:
- Intra-State (Within State): CGST (Central GST) and SGST (State GST) are charged. They are split equally (e.g. 18% GST = 9% CGST + 9% SGST).
- Inter-State (Across State Borders): IGST (Integrated GST) is charged. The full rate goes to the Central Government.
Use our Indian GST Calculator to compute the splits between CGST, SGST, and IGST for any transaction amount.
Frequently Asked Questions
What is CGST, SGST, and IGST?
CGST is Central GST, SGST is State GST, and IGST is Integrated GST. CGST and SGST apply to sales inside a single state, while IGST applies to sales crossing state borders.
How do I extract GST from a total inclusive price?
To remove GST, divide the total price by (1 + GST rate as a decimal). For example, if a smartphone is ₹11,200 inclusive of 12% GST, the base price is 11,200 / 1.12 = ₹10,000, and the GST portion is ₹1,200.
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