The two GST formulas
Adding GST: GST = price × rate ÷ 100
Removing GST: price before GST = inclusive price × 100 ÷ (100 + rate)
Example: a ₹11,800 bill with 18% GST has a taxable value of 11,800 × 100 ÷ 118 = ₹10,000, and GST of ₹1,800. A common mistake is to take 18% of ₹11,800 (₹2,124), which overstates the tax.
GST rates after GST 2.0
From 22 September 2025, most goods and services moved to two main rates, 5% and 18%, with 40% for luxury and “sin” goods. The old 12% and 28% slabs were folded into these for most items.
| Rate | Typical items |
|---|---|
| 0% | Fresh food, milk, many life-saving drugs, individual health and life insurance |
| 0.25% / 3% | Rough diamonds / gold, silver and jewellery |
| 5% | Packaged food staples, many medicines, hotel rooms up to ₹7,500, most daily-use items |
| 18% | Most services, electronics, small cars, cement, restaurant food in hotels with costly rooms |
| 40% | Pan masala, aerated and sugary drinks, large cars and motorcycles above 350cc |
Rates depend on the exact HSN or SAC code, so check the official rate notification for your item.
CGST, SGST and IGST
When the seller and the place of supply are in the same state, GST is split equally: half CGST to the Centre and half SGST (or UTGST) to the state. For a sale to another state it is charged as a single IGST.
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Questions people ask
How do I calculate 18% GST on a price?
Multiply by 0.18 for the GST, or by 1.18 for the total. ₹5,000 + 18% GST = ₹5,900.
How do I remove 18% GST from a total?
Divide the total by 1.18. ₹5,900 ÷ 1.18 = ₹5,000 before GST.
Who needs to register for GST?
Businesses selling goods with turnover above ₹40 lakh a year (₹20 lakh in some states), or services above ₹20 lakh (₹10 lakh in special category states). Some, like e-commerce sellers, must register regardless.