How to Calculate GST in India — Step by Step

Every GST calculation starts with one question: is the amount you're holding before tax or after tax? A quote of "₹12,500 + GST" and a receipt showing "₹2,360 incl. GST" need opposite formulas. Use the add-on formula on that receipt and you get ₹424.80 of GST, when the tax inside ₹2,360 at 18% is ₹360.

Adding GST to a pre-tax amount

When the price is exclusive of tax, GST is a straight percentage of it.

GST = Amount × Rate ÷ 100
Total = Amount + GST

Example: a design retainer billed at ₹12,500 with 18% GST.
GST = 12,500 × 18 ÷ 100 = ₹2,250
Total = ₹14,750

Removing GST from a price that already includes it

When the tax is already inside the price, you can't take 18% of the total. That would charge tax on the tax. Divide the rate back out instead.

Base = Price × 100 ÷ (100 + Rate)
GST = Price − Base

Example: a receipt for ₹2,360 that includes 18% GST.
Base = 2,360 × 100 ÷ 118 = ₹2,000
GST = 2,360 − 2,000 = ₹360

Multiplying ₹2,360 by 18% gives ₹424.80, which overstates the tax by ₹64.80. A useful sanity check: the GST share of an inclusive price is always rate ÷ (100 + rate). So 18% GST is 15.25% of the final price, 5% GST is 4.76% of it, and 40% GST is 28.57% of it.

CGST + SGST or IGST: same total, different split

The rate you calculate with is the combined GST rate. Where the amount goes depends on whether the supply stays inside one state:

• Intra-state supply (supplier and place of supply in the same state): the GST is split equally, so 18% becomes 9% CGST + 9% SGST. In a Union Territory without its own legislature, such as Chandigarh, UTGST takes the place of SGST.
• Inter-state supply: the full 18% is charged as IGST.

For the ₹12,500 retainer above, a Pune freelancer billing a Mumbai client (both Maharashtra) shows ₹1,125 CGST + ₹1,125 SGST. The same invoice to a client registered in Bengaluru shows ₹2,250 IGST. For most business-to-business services, the place of supply is the location of the registered client, so the client's GSTIN usually settles which split to use.

Invoices with more than one rate

If lines on one invoice fall under different slabs, calculate GST line by line. A blended rate across the total won't be right.

The invoice total is ₹26,100. Applying 18% to the whole ₹23,000 would have charged ₹4,140, which is ₹1,040 too much, and the per-rate breakdown in your return would no longer match the invoice.

Discounts: reduce the price first, then add tax

A discount shown on the invoice at the time of supply reduces the taxable value, so GST is calculated on the discounted amount.

Service fee ₹10,000, less 10% discount = ₹9,000 taxable
GST at 18% = ₹1,620, invoice total ₹10,620

Doing it the other way round (tax on ₹10,000 = ₹1,800, total ₹11,800, then subtracting ₹1,000) produces ₹10,800. The client pays ₹180 more, all of it extra tax on money they never paid.

Rounding

Calculate each line's GST to the paisa, then round once at the end if you round at all. Section 170 of the CGST Act rounds tax payable to the nearest rupee (50 paise and above rounds up), which is why returns deal in whole rupees. Rounding every line on the invoice first can leave its total a rupee or two away from the sum of its lines.

Checking your numbers quickly

The GST Calculator has separate Add GST and Remove GST modes, so you pick the formula by choosing the mode rather than remembering it. The rate presets are the post-September-2025 slabs (0%, 5%, 18%, 40%). It shows the base amount, the GST, and the final price. It reports GST as one combined figure, so for an intra-state invoice, halve it to get the CGST and SGST lines. Use it when checking a supplier's quote or pulling the tax back out of a receipt for your books.

For the invoice itself, the Invoice Generator builds an itemized PDF with one tax rate applied to the subtotal. For a mixed-rate invoice like the table above, work out each rate group first. If you're not sure which slab an item belongs to, look up its HSN or SAC code with the HSN/SAC search on the GST portal and check the rate notified for it; the invoicing guide covers the fields a GST invoice needs.