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How GST Is Calculated: CGST, SGST & IGST Explained
GST is simpler than it looks. To add GST, you multiply the amount by the rate — 18% on ₹10,000 is ₹1,800, so the total is ₹11,800. The only twist is which GST applies: for a sale within your state, the tax splits equally into CGST and SGST; for a sale to another state, a single IGST is charged at the full rate. The amount of tax is identical either way — only the split changes. This guide walks through the slabs, the split, and how to work backwards from a GST-inclusive price.
The GST rate slabs
GST in India has five main slabs — 0%, 5%, 12%, 18% and 28% — and the rate depends on the goods or service. Essentials often sit at 0% or 5%, most services at 18%, and luxury or "sin" goods at 28%. The first thing to know for any calculation is the correct rate for what you're selling or buying.
Adding GST to a price
This is the everyday case. GST amount = price × rate ÷ 100, and the total = price + GST. On a ₹10,000 service at 18%, GST is ₹1,800 and the customer pays ₹11,800. Simple.
CGST + SGST vs IGST
Here's the part that confuses people. The total tax is the same; only how it's divided differs, based on the place of supply:
- Intra-state (buyer in your state): the GST splits equally into CGST (central) and SGST (state). At 18%, that's 9% CGST + 9% SGST.
- Inter-state (buyer in another state): a single IGST at the full rate — 18%.
So ₹1,800 of tax on that ₹10,000 sale is either ₹900 + ₹900 (intra-state) or ₹1,800 IGST (inter-state). If you raise invoices, the GST invoice generator applies this split automatically once you pick the states.
Removing GST from an inclusive price
Sometimes you have the final, GST-inclusive price and need to find the tax inside it. The formula is: GST = price × rate ÷ (100 + rate). On a ₹11,800 inclusive price at 18%, that's ₹11,800 × 18 ÷ 118 = ₹1,800, leaving a base of ₹10,000. Don't just take 18% of the inclusive price — that overstates the tax.
HSN and SAC codes
Every product has an HSN code and every service a SAC code, which fix the applicable GST rate and must appear on tax invoices above certain turnover thresholds. Using the right code keeps your invoice compliant and the rate correct.