What is the GST?
GST (Goods and Services Tax) is India’s unified indirect tax. Since 22 September 2025 the rate structure has two main slabs — 5% (merit rate) and 18% (standard rate) — with a 40% de-merit rate on selected sin and luxury goods. The old 12% and 28% slabs were withdrawn in that reform; a few special rates such as 3% on gold and silver and 0.25% on rough diamonds continue, and many essentials are nil-rated. Within a state, GST splits equally into CGST (central) and SGST (state); across states it is charged as IGST at the full rate.
Two directions matter in daily use: adding GST to a base price when you raise an invoice or quote, and removing GST from an MRP or bill to find the pre-tax price — for expense reports, input-credit claims and price comparisons.
Formula & worked example
Remove: Base = Total ÷ (1 + r) · GST = Total − Base
Worked example (remove): a service bill of ₹25,000 including 18% GST → Base = 25,000 ÷ 1.18 = ₹21,186.44; GST = ₹3,813.56, split as CGST ₹1,906.78 + SGST ₹1,906.78. Note the common mistake: taking 18% of 25,000 (₹4,500) overstates the tax — you must divide, not multiply.
How to use this gst calculator
- Enter the amount and pick the GST slab for the goods/service.
- Choose Add GST for a pre-tax price (making an invoice) or Remove GST for a tax-inclusive price (reading a bill).
- Use the CGST/SGST split directly in your invoice; for inter-state supply, show the full amount as IGST instead.
Smart tips
- Since the 22 September 2025 reform the working slabs are 5% (merit rate — most daily-use and processed foods, transport, standalone restaurants) and 18% (standard rate — most services, software and electronics), with 40% reserved for selected sin and luxury goods. Rates are set per HSN/SAC code, so check the CBIC rate finder for your exact item rather than assuming a slab.
- Registered businesses can claim input tax credit on purchases — always collect GST invoices with your GSTIN.
- Freelancers must register once turnover crosses ₹20 lakh (services); quoting "plus 18% GST" avoids margin erosion.
- When comparing quotes, check whether prices are inclusive or exclusive of GST — an 18% swing changes the winner.
- MRPs already include GST by law; nobody may charge GST on top of MRP.
Frequently asked questions
How do I remove GST from an inclusive price?
Divide by (1 + rate). For 18%: base = price ÷ 1.18. Subtracting 18% of the inclusive price is wrong and overstates the tax — the reverse calculation must undo a multiplication.
What are CGST, SGST and IGST?
For sales within a state, GST splits equally into CGST (to the centre) and SGST (to the state) — 9% + 9% on an 18% item. Inter-state sales charge a single IGST at the full rate. Your invoice must use the correct pair.
Which GST rate applies to my product or service?
Rates are set per HSN/SAC code by the GST Council. Most professional services and software fall at 18%. Check the official CBIC rate finder for your specific code — this calculator handles any slab including a custom one via the amount math.
Is GST charged on MRP?
No. MRP is inclusive of all taxes by definition. If a shop adds GST on top of MRP, that is illegal overcharging — use the Remove-GST mode to see the built-in tax instead.
Do freelancers need to charge GST?
Registration becomes mandatory at ₹20 lakh annual turnover for services (₹10 lakh in special-category states). Below that it is optional — but voluntary registration lets you claim input credit and looks professional to corporate clients.
Want the theory behind the numbers? Read our money Q&As on the Money Blog.