GST (Goods and Services Tax) is an indirect tax levied on the supply of goods and services in India. Understanding how to calculate GST is essential for businesses, freelancers, and consumers alike.
🧮 Basic GST Formula
GST Amount = (Original Price × GST Rate) ÷ 100
Final Price = Original Price + GST Amount
GST Rates in India
India has 5 GST rate slabs for different types of goods and services:
Calculation Examples
Example 1: Restaurant Bill (18% GST)
Original Amount: ₹1,000
GST Rate: 18%
Calculation:
GST Amount = (1,000 × 18) ÷ 100 = ₹180
Final Bill = 1,000 + 180 = ₹1,180
Example 2: Laptop Purchase (12% GST)
Original Price: ₹45,000
GST Rate: 12%
Calculation:
GST Amount = (45,000 × 12) ÷ 100 = ₹5,400
Total Price = 45,000 + 5,400 = ₹50,400
Example 3: Luxury Car (28% GST)
Original Price: ₹10,00,000
GST Rate: 28%
Calculation:
GST Amount = (10,00,000 × 28) ÷ 100 = ₹2,80,000
Total Price = 10,00,000 + 2,80,000 = ₹12,80,000
Reverse Calculation: Finding Original Price
Sometimes you have the final price (including GST) and need to find the original price:
Reverse Formula:
Original Price = (Final Price × 100) ÷ (100 + GST Rate)
Example:
You paid ₹1,180 at a restaurant (18% GST included). What was the original amount?
Original = (1,180 × 100) ÷ (100 + 18) = 1,18,000 ÷ 118 = ₹1,000
GST Amount = 1,180 - 1,000 = ₹180
Understanding CGST, SGST, and IGST
GST is actually divided into three components:
CGST (Central GST)
Tax collected by Central Government (50% of total GST)
SGST (State GST)
Tax collected by State Government (50% of total GST)
IGST (Integrated GST)
For inter-state transactions (100% to Central, redistributed later)
Example: ₹1,000 item with 18% GST (within same state)
Total GST: ₹180
- • CGST (9%): ₹90 → Goes to Central Government
- • SGST (9%): ₹90 → Goes to State Government
- • Customer pays: ₹1,180
Quick Tips
- ✓ Always check the GST rate for the product/service category
- ✓ Ask for GST invoice from sellers—required for tax filing and claims
- ✓ Input Tax Credit (ITC): Businesses can claim GST paid on purchases
- ✓ E-invoicing mandatory for businesses with turnover above certain threshold
- ✓ File GST returns on time to avoid penalties (GSTR-1, GSTR-3B)
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