How GST is calculated: adding, removing and splitting it

Adding GST to a price before tax

If you know the taxable value, which is the price before GST, the tax is that value multiplied by the rate: GST = price × rate ÷ 100. The total the buyer pays is the price plus the GST, which is the same as price × (1 + rate ÷ 100).

At 5%, a taxable value of ₹4,500 carries ₹225 of GST (4,500 × 5 ÷ 100), so the invoice total is ₹4,725. At 18%, ₹2,000 carries ₹360 of GST and the total is ₹2,360.

Removing GST from an inclusive price

MRPs and prices marked "inclusive of GST" already contain the tax. To find the taxable value, divide by one plus the rate: price before GST = inclusive price ÷ (1 + rate ÷ 100). The GST is the difference between the two. A shortcut gives the tax directly: GST = inclusive price × rate ÷ (100 + rate). So the GST is 18/118 of an 18% inclusive price, and 5/105 (one twenty-first) of a 5% inclusive price.

At 18%, ₹2,360 ÷ 1.18 = ₹2,000, so the price contains ₹360 of GST. At 5%, ₹1,299 ÷ 1.05 = ₹1,237.14 (rounded to the paisa), which leaves ₹61.86 of GST.

The common mistake is to take the rate straight off the inclusive price. 18% of ₹2,360 is ₹424.80, which overstates the tax by ₹64.80 and gives a base price of ₹1,935.20. Adding 18% back to ₹1,935.20 gives ₹2,283.54, not ₹2,360, which exposes the error. The rate applies to the price before tax, so you remove it by dividing, never by subtracting a percentage of the total. Whichever direction you work in, add the GST back to the base and check that you arrive at the price you started from.

CGST and SGST, or IGST

GST is collected under different heads depending on whether a supply stays within one state or crosses a state border. A supply within a state carries CGST, which goes to the central government, and SGST, which goes to the state, each at half the rate. In union territories without their own legislature, such as Chandigarh and Ladakh, UTGST takes the place of SGST. A supply from one state to another carries IGST at the full rate.

The total is the same either way. On a taxable value of ₹50,000 at 18%, an intra-state invoice shows CGST at 9% (₹4,500) and SGST at 9% (₹4,500), while an inter-state invoice shows IGST at 18% (₹9,000). Both invoices total ₹59,000. At 5% the halves are 2.5% each, so the ₹225 of GST on ₹4,500 becomes CGST ₹112.50 plus SGST ₹112.50.

Which applies depends on the place of supply. For goods that are delivered, that is generally where the delivery ends; services follow their own rules. Matching totals don't make the choice unimportant: tax paid under the wrong head generally has to be paid again under the right one, with a refund claimed for the first payment. If a transaction isn't straightforward, ask an accountant.

Rounding on invoices: per line or on the total

GST rarely comes to a whole number of paise, so every invoice rounds somewhere, and where it rounds changes the answer slightly. Take ten lines with a taxable value of ₹33.30 each at 18%, ₹333.00 in all. Rounding the tax on each line gives ₹5.99 per line (from ₹5.994), or ₹59.90 in total. Working out CGST and SGST separately on each line at 9% gives ₹3.00 + ₹3.00 per line (from ₹2.997), or ₹60.00. Working on the invoice total gives ₹333.00 × 18% = ₹59.94, split as CGST ₹29.97 and SGST ₹29.97.

The three answers are a few paise apart, and that is normal. What matters is to use one method consistently, usually whatever your billing software is set to, and to make sure the printed lines add up to the printed total. If your figure and a supplier's differ by a few paise, a different rounding point is the likely reason.

Many invoices also round the grand total to the nearest rupee and show the difference on a separate "Round off" line. Working back from a ₹999 shelf price at 18% shows why: the taxable value is ₹846.61, and CGST and SGST at 9% each come to ₹76.19, which adds up to ₹998.99. A round-off of ₹0.01 brings the bill back to ₹999.

Which GST rate applies?

From 22 September 2025, most goods and services in India fall under two main rates, 5% and 18%. A 40% rate applies to a short list of luxury and "sin" goods, and some items carry 0%, 0.25% or 3%. Invoices issued before that date may show the older 12% and 28% rates.

Rates are notified against classification codes (HSN for goods, SAC for services), and some depend on details such as the sale value per piece. This guide deliberately doesn't list rates for particular items. Look up your goods or service on the CBIC GST portal (cbic-gst.gov.in), or ask a tax professional, before you rely on a figure.

Doing the sums with the FlexyPdf GST Calculator

The GST Calculator does both calculations. Choose Add GST when your amount is before tax or Remove GST when it already includes tax, type the amount in rupees, then pick a rate. The preset buttons are 0%, 3%, 5%, 18% and 40%, and Custom accepts any other rate, including decimals such as 0.25 or the older 12 and 28.

The result shows the base amount, the GST and the total, then a Tax Breakdown with CGST and SGST at half the rate each beside IGST at the full rate, and a summary table. Each figure is rounded to the paisa, which matches the "on the total" method above; to reproduce per-line rounding, run each line separately. The calculator doesn't know which rate applies to what you sell.

If you then need a simple invoice, the Invoice Generator applies one tax rate to the subtotal after any discount and rounds the tax once. It prints a single tax line rather than a CGST/SGST split. The Number to Words tool can write the final amount out in rupees.

What a GST calculator doesn't handle

A GST calculator applies one rate to one amount. Several parts of the GST system sit outside that sum, and for these the official portal or a tax professional is the right source:

• Cess. Some goods have carried a cess on top of GST. A GST calculator applies only the rate you choose.
• Input tax credit (ITC). A registered business can usually offset the GST it pays on purchases against the GST it collects on sales, subject to conditions. The GST on one invoice is therefore not what the business owes in its return.
• Reverse charge. For some supplies the recipient, not the supplier, pays the GST to the government. The arithmetic is the same; who pays is different.
• TDS and TCS under GST. Certain government bodies deduct GST TDS from payments to their suppliers, and e-commerce operators collect GST TCS from sellers on their platforms. These change how much cash the seller receives, not the GST on the invoice.
• Composition scheme. Businesses in the composition scheme don't charge GST on their bills; they pay tax on their turnover instead, so the add and remove sums above don't apply to their sales.