In this article
GST calculations come up every day — pricing a product, checking a supplier’s bill, quoting a client. There are only two situations, and each has one simple formula. The mistakes happen when people use the wrong one.
Situation 1: adding GST to a price (exclusive)
When a price is exclusive of GST, the tax hasn’t been added yet. This is typical for B2B quotes and service fees (“₹50,000 + GST”).
GST amount = Price × Rate ÷ 100
Total = Price + GST amount
Example: a web designer charges ₹50,000 + 18% GST.
GST = 50,000 × 18 ÷ 100 = ₹9,000
Total invoice = ₹59,000
A quick shortcut: multiply by 1.18 for 18%, 1.12 for 12%, 1.05 for 5% and 1.28 for 28%.
Situation 2: extracting GST from an inclusive price
When a price includes GST — like the MRP on a product or a café menu price — you sometimes need to know how much of it is tax. This is where most people go wrong.
Price before GST = Inclusive price × 100 ÷ (100 + Rate)
GST amount = Inclusive price − Price before GST
Example: a product sells for ₹1,180 including 18% GST.
Price before GST = 1,180 × 100 ÷ 118 = ₹1,000
GST included = 1,180 − 1,000 = ₹180
The common mistake
Many people calculate 18% of ₹1,180 = ₹212.40 and call that the GST. It’s wrong because GST was calculated on ₹1,000, not on ₹1,180. Taking a percentage of the total always overstates the tax.
Splitting into CGST and SGST
The rate you charge is the same, but how it is split depends on where the buyer is:
| Sale | How 18% GST is shown |
|---|---|
| Within the same state | CGST 9% + SGST 9% |
| To another state | IGST 18% |
| Export (zero-rated) | Under LUT/bond without tax, or IGST with refund — depending on how you export |
So on the ₹50,000 design job above, a client in the same state sees CGST ₹4,500 + SGST ₹4,500. A client in another state sees IGST ₹9,000. Your customer pays the same total either way.
GST and discounts
If you give a discount on the invoice, GST is calculated on the price after the discount.
List price ₹2,000, 10% discount → taxable value ₹1,800. GST at 18% = ₹324. Total = ₹2,124.
Quick reference
| Price | Rate | GST | Total |
|---|---|---|---|
| ₹1,000 | 5% | ₹50 | ₹1,050 |
| ₹1,000 | 12% | ₹120 | ₹1,120 |
| ₹1,000 | 18% | ₹180 | ₹1,180 |
| ₹1,000 | 28% | ₹280 | ₹1,280 |
GST rates for specific goods and services are revised from time to time, so check the current rate for your item.
Skip the arithmetic
Our GST Calculator does both directions instantly: choose Add GST or Remove GST, pick the rate, and it shows the net amount, GST, the CGST/SGST split and the total. It also works for VAT or any sales tax — just type in your rate.
Free toolTry the GST CalculatorAdd GST to a net price or extract GST from a GST-inclusive amount.Frequently asked questions
Why can't I just take 18% off an inclusive price?
Because the 18% was calculated on the pre-tax price, not on the total. 18% of ₹1,180 is ₹212.40, but the GST actually included is only ₹180.
Is MRP inclusive of GST?
Yes. In India the MRP printed on packaged goods includes all taxes, so a shop cannot add GST on top of the MRP.
How do I calculate GST on a discounted price?
Apply the discount first, then calculate GST on the discounted (taxable) value — as long as the discount is shown on the invoice at the time of sale.
Written by the Toolsopedia team. Spotted an error? Tell us and we’ll fix it.