The two formulas
Every GST calculation is one of two cases. When a price excludes GST, multiply by the rate: GST = amount × rate ÷ 100, and the invoice total is amount + GST. When a price already includes GST — the usual case on shop shelves — you extract it: base = total × 100 ÷ (100 + rate), and GST = total − base.
A quick check: ₹1,180 including 18% GST has a base of ₹1,180 × 100 ÷ 118 = ₹1,000, so the GST is ₹180. A common mistake is to take 18% of ₹1,180 (₹212.40) — that overstates the tax because it charges GST on the GST.
CGST, SGST and IGST
The rate is the same either way; only the split changes:
- Same state (intra-state): half goes to the Centre as CGST and half to the state as SGST — 18% becomes 9% + 9%.
- Different state (inter-state): the full 18% is IGST, collected by the Centre and shared later.
- Union territories without a legislature use UTGST instead of SGST.
What changed with GST 2.0
From 22 September 2025 the GST Council collapsed most items into two main slabs, 5% and 18%, with a separate 40% rate for luxury and sin goods such as tobacco, pan masala and aerated drinks. Most items previously at 12% moved to 5%, and most items at 28% moved to 18%. Gold stays at 3% and rough diamonds at 0.25%.
If you are reconciling older invoices you will still see 12% and 28% — the GST calculator keeps those rates for that reason.
Rounding and invoices
Compute tax per line item, round to two decimals, then total the invoice. Many accounting tools round only the final total, which can create one-paisa differences against the GST portal — harmless, but worth knowing when you reconcile.
> This guide explains the arithmetic. The rate for a specific product depends on its HSN/SAC code — check the CBIC rate schedule or ask your accountant.