How to Calculate GST: Adding It, Extracting It and Splitting CGST, SGST and IGST

Add 18% GST to ₹10,000 and the invoice reads ₹11,800. Now take a receipt that says ₹11,800 inclusive of GST and ask how much of it is tax. Most people multiply by 18% and get ₹2,124. The right answer is ₹1,800. Taking the rate off the wrong number is behind most of the GST arithmetic that goes wrong on invoices, expense claims and price comparisons.

Both directions are built into the GST calculator. This is what it is doing, when each direction applies, and how the same ₹1,800 gets split between the Centre and the state.

The three calculations

Adding GST (you know the base price, you want the invoice total):

• GST = base × rate ÷ 100
• Total = base × (1 + rate ÷ 100)
• ₹10,000 at 18%: GST ₹1,800, total ₹11,800

Extracting GST (you know the inclusive price, you want the tax inside it):

• GST = total × rate ÷ (100 + rate)
• Base = total × 100 ÷ (100 + rate)
• ₹11,800 at 18%: GST ₹11,800 × 18 ÷ 118 = ₹1,800, base ₹10,000

The denominator is 118, not 100, because the ₹11,800 already contains the tax. That single detail is the whole difference between the right answer and ₹2,124.

Reverse GST is the same extraction used in the other direction: a client agrees to pay ₹2,360 all-inclusive, so your fee is ₹2,360 × 100 ÷ 118 = ₹2,000 and the GST line is ₹360. Quote the ₹2,000, add 18%, and the invoice lands exactly on the agreed figure.

Rate	To add GST, multiply by	To extract GST, divide by	GST inside an inclusive price
5%	1.05	1.05	5 ÷ 105 of the total
18%	1.18	1.18	18 ÷ 118 of the total
40%	1.40	1.40	40 ÷ 140 of the total

Why 18% of ₹11,800 is wrong

The 18% is a rate on the base, and the base is ₹10,000. Applying it to ₹11,800 taxes the tax, which overstates GST by ₹324 on this invoice and by ₹3,240 on a ₹1,18,000 one. Get this wrong on a purchase invoice and you claim input tax credit you are not entitled to; get it wrong on an expense claim and finance sends it back. If you only remember one thing from this page: the rate always goes on the amount that does not yet contain GST.

CGST, SGST and IGST: one amount, two ways to split it

The ₹1,800 does not change. What changes is who collects it, and that depends on where the supply happens.

Supply	Tax charged on ₹10,000 at 18%	Invoice lines
Within one state (Mumbai to Pune)	CGST 9% + SGST 9%	₹900 + ₹900
Across states (Mumbai to Bengaluru)	IGST 18%	₹1,800
Within a Union Territory	CGST 9% + UTGST 9%	₹900 + ₹900
Import	IGST 18% (plus customs duty)	₹1,800

For goods, the place of supply is where the goods are delivered. For most services it is the recipient's registered address. The total a customer pays is identical either way; the split only decides which government the money reaches and how the invoice has to be written. For a registered business the split matters once more at return time: CGST credit can be set off against CGST or IGST, SGST credit against SGST or IGST, and IGST credit against all three, IGST first.

The slabs since 22 September 2025

The GST Council's 56th meeting, on 3 September 2025, collapsed the four-slab structure into two main rates from 22 September 2025:

• 5% for essentials and mass-consumption items: most packaged food, personal care basics like soap and toothpaste, medicines, and a long list that used to sit at 12%.
• 18% for most other goods and services, including items that used to be at 28%: small cars, air conditioners, televisions, cement.
• 40% on a short list of sin and luxury goods such as sugary and caffeinated drinks, cars above the small-car limits, motorcycles over 350cc and yachts. Tobacco and pan masala have their own rate-plus-cess arrangement on a separate timetable, so check the current notification before quoting anything in that category.

Nil-rated items (unbranded staples, fresh produce, and, since the same change, individual health and life insurance premiums) stay at zero, and the special 0.25% and 3% rates for rough diamonds and gold or silver jewellery continue. If a supplier's quote still shows 12% or 28%, it was prepared from an old chart: ask for the HSN or SAC code and look up the rate that applies now.

Who can and cannot charge it

• Registration is compulsory once turnover crosses ₹40 lakh for goods or ₹20 lakh for services, with lower limits of ₹20 lakh and ₹10 lakh in the special-category states. Below that you can register voluntarily, which lets you claim input credit but also obliges you to file returns.
• A business on the composition scheme (turnover up to ₹1.5 crore for goods, ₹50 lakh for services) pays a flat 1% as a trader or manufacturer, 5% as a restaurant or 6% for services, out of its own pocket. It cannot put GST on its invoices and cannot claim input credit, so a composition dealer quoting you "plus 18% GST" is doing something it is not allowed to do.
• Under reverse charge, the buyer pays the GST instead of the seller: a company taking services from an advocate or a goods transport agency, for instance. The calculation is the same; only the person depositing it changes.
• An MRP already includes GST. A shop that prints ₹2,360 on the pack and then adds 18% at the till is charging tax twice.

Four invoices, worked

Situation	Base	Rate	GST	Total
Freelancer's design fee, plus GST	₹50,000	18%	₹9,000	₹59,000
Restaurant bill, GST inside the total	₹1,000	5%	₹50	₹1,050
Client pays ₹2,360 all-in	₹2,000	18%	₹360	₹2,360
Small car, ex-showroom price plus GST	₹8,00,000	18%	₹1,44,000	₹9,44,000

The restaurant line is the one people miss: the bill says ₹1,050, the tax inside it is ₹1,050 × 5 ÷ 105 = ₹50, not ₹52.50. Restaurants also charge that 5% without input credit, which is why a restaurant cannot pass its own GST costs on to you as a separate line.

What people get wrong

• Applying the rate to the inclusive amount. Divide by 118, do not multiply by 0.18.
• Adding GST on top of an MRP. The tax is already inside it.
• Quoting 12% or 28%. Both slabs went on 22 September 2025; anything still showing them is stale.
• Rounding each line. Tax on an invoice is rounded to the nearest rupee on the total, not line by line, so paise differences between your spreadsheet and the invoice are normal.
• Confusing margin with GST. A 20% margin is calculated on your cost, then GST goes on the selling price. The profit margin calculator handles the first step and the GST calculator the second; mixing them up under-prices the job.
• Treating percentages loosely. Adding 18% and then removing 18% does not get you back to the start, which is the same arithmetic covered in how to calculate percentage and the percentage calculator.

FAQ

How do I calculate GST from the total amount?

Multiply the total by the rate and divide by 100 plus the rate. For ₹11,800 at 18% that is ₹11,800 × 18 ÷ 118 = ₹1,800, and the base price is ₹10,000.

Is CGST plus SGST the same as IGST?

Yes in amount. An 18% supply within a state is billed as 9% CGST plus 9% SGST; the same supply across state lines is billed as 18% IGST. The customer pays the same total; the split only changes which government receives it.

What are the GST rates in India now?

Since 22 September 2025 there are two main rates, 5% and 18%, a 40% rate for a short list of sin and luxury goods, nil for essentials, and special 0.25% and 3% rates for rough diamonds and precious-metal jewellery. The old 12% and 28% slabs no longer apply.