What is GST?
GST (Goods and Services Tax) is India's unified indirect tax that replaced VAT, Service Tax, Excise Duty, and 17 other taxes from July 1, 2017. It is a destination-based tax collected at every stage of the supply chain, with input tax credit available to businesses at each stage.
How is GST Calculated?
GST can be added to a base price (exclusive) or removed from an MRP (inclusive price). The rate depends on the category of goods or services — 5%, 12%, 18%, or 28%.
To ADD GST (exclusive price → inclusive):
GST Amount = Base Amount × GST% / 100
Total Price = Base Amount + GST Amount
To REMOVE GST (from MRP/inclusive price):
Base Amount = MRP × 100 / (100 + GST%)
GST Amount = MRP − Base Amount
GST Calculation Example
Suppose you buy a product with a base price of ₹1,000 at 18% GST:
Adding GST:
GST = ₹1,000 × 18/100 = ₹180
Total = ₹1,180 (CGST ₹90 + SGST ₹90)
Reverse from MRP ₹1,180:
Base = ₹1,180 × 100/118 = ₹1,000
GST = ₹1,180 − ₹1,000 = ₹180
GST Slabs in India 2026-27
0%: Fresh food, milk, eggs, books, healthcare, education. 5%: Packaged food, household items, economy class air travel, restaurants without AC. 12%: Computers, processed food, business class travel. 18%: Most services, AC restaurants, electronics, consumer goods. 28%: Luxury cars, tobacco, aerated drinks, casinos.
CGST, SGST vs IGST
For intra-state sales (within same state), GST splits equally — half as CGST to the Centre, half as SGST to the State. For inter-state sales, the full rate applies as IGST (Integrated GST), which is later divided between Centre and the destination state.
Who Needs a GST Calculator?
Business owners filing GSTR returns, freelancers raising GST invoices, consumers checking if MRP includes GST, and accountants verifying input tax credit all use GST calculators daily. If your annual turnover exceeds ₹40 lakh (₹20 lakh for services), GST registration is mandatory.
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Frequently Asked Questions
What are the GST slabs in India? ⌄
GST has four main slabs: 5% (essential goods, restaurants), 12% (processed food, computers), 18% (most goods and services, AC restaurants), and 28% (luxury goods, cars, tobacco). Some items like fresh food and healthcare are at 0%.
What is the difference between CGST, SGST, and IGST? ⌄
For intra-state sales, GST is split equally into CGST (Central GST) and SGST (State GST). For inter-state sales, IGST (Integrated GST) is charged at the full rate, which is later divided between centre and state.
How do I calculate GST on an MRP price? ⌄
To reverse-calculate GST from an MRP (inclusive price): GST Amount = MRP − (MRP × 100 / (100 + GST%)). For example, MRP ₹118 at 18% GST → GST = 118 − (118 × 100/118) = ₹18.
Who needs to register for GST? ⌄
Any business with annual turnover above ₹40 lakh (₹20 lakh for services, ₹10 lakh for special category states) must register for GST. E-commerce sellers and inter-state suppliers must register regardless of turnover.
What is a composite GST rate? ⌄
Small businesses with turnover below ₹1.5 crore can opt for the Composition Scheme, paying a flat GST rate (1% for traders, 5% for restaurants, 6% for services) instead of the regular slab rates. They cannot claim ITC.