How to Calculate GST: Forward and Reverse Formulas

To add GST, multiply the price before tax by the GST rate: at 18%, a ₹1,000 item carries ₹180 GST and costs ₹1,180. To remove GST from a tax-inclusive price, divide by (1 + rate): ₹1,180 ÷ 1.18 = ₹1,000. Within a state, split the tax equally into CGST and SGST.

Key formulas

The main GST rates since 22 September 2025 are 5% and 18%, with 40% on luxury and sin goods. Gold and silver pay 3%. Check the rate for your item on our GST rates and slabs page before you calculate.

Formula to add GST

Use this when you know the price before tax, for example when you raise an invoice or get a quote “plus GST”.

1. Find the GST rate for the item or service.
2. Multiply the base price by the rate and divide by 100. That is the GST amount.
3. Add the GST amount to the base price to get the invoice total.

Example: a supplier quotes ₹25,000 plus 18% GST. GST = ₹25,000 × 18 ÷ 100 = ₹4,500. You pay ₹29,500.

Apply GST to the price after any discount shown on the invoice. The shortcut is to multiply once by 1.05, 1.18 or 1.40, depending on the rate.

Formula to remove GST from an MRP

The MRP on a packaged product already includes all taxes. The Legal Metrology (Packaged Commodities) Rules, 2011 require the label to say so. To find the tax inside an MRP, work backwards.

1. Add the rate to 100. At 18% that gives 118.
2. Divide the MRP by that number and multiply by 100. This gives the base price.
3. Subtract the base price from the MRP. The difference is the GST.

Example: a packaged item in the 18% slab has an MRP of ₹2,360. Base price = ₹2,360 × 100 ÷ 118 = ₹2,000. GST = ₹360.

A common mistake is to take 18% of the MRP. That gives ₹424.80, which is wrong, because 18% applies to the base price. Tax is 18/118 of the inclusive price, about 15.25%. At 5% it is 5/105 (about 4.76%), and at 40% it is 40/140 (about 28.57%).

Splitting CGST and SGST

When the supplier and the place of supply are in the same state, the bill shows two taxes of equal size. The Centre levies CGST and the state levies SGST. In Union Territories without a legislature, such as Chandigarh, UTGST replaces SGST.

Calculate the total GST first and then halve it. The two halves should add back to the total.

IGST on inter-state bills

When goods or services go from one state to another, the supplier charges IGST instead. IGST is generally equal to CGST plus SGST, so the customer pays the same total. Only the label on the invoice changes.

Example: a Delhi seller ships a ₹10,000 order of 18% goods to Kolkata. The invoice shows IGST of ₹1,800 and a total of ₹11,800. Had the buyer been in Delhi, it would show CGST ₹900 and SGST ₹900. Imports also carry IGST.

Examples at 5%, 18% and 40%

The same rates worked backwards from an inclusive price:

For quick checks, the GST calculator does both directions and shows the CGST/SGST split.

Rounding rules on invoices

Section 170 of the CGST Act, 2017 says tax, interest, penalty and refunds are rounded to the nearest rupee. Fifty paise or more rounds up to one rupee; less than fifty paise is dropped.

Example: GST at 18% on ₹333 is ₹59.94, which rounds to ₹60. Tax on ₹111 at 5% is ₹5.55, which rounds to ₹6.

A few points to keep your bills clean:

• Calculate tax on the exact base price and round only the final tax figure. Rounding the base price first can shift the tax.
• Show the rate and tax amount separately on a tax invoice, as Rule 46 of the CGST Rules requires, with the HSN or SAC code where your turnover calls for it.
• Check that CGST and SGST each come to half the rounded total, so the invoice adds up.

Businesses under the composition scheme cannot charge GST on their bills, so none of these formulas apply to their sales. If you are unsure which rate or place of supply applies, check with a GST practitioner before you invoice.

Frequently asked questions

How do I calculate 18% GST on an amount?

Multiply the amount by 0.18 for the tax, or by 1.18 for the total. On ₹5,000, GST is ₹900 and the total is ₹5,900.

How do I remove GST from a total amount?

Divide the total by 1 plus the rate. At 18%, divide by 1.18; at 5%, divide by 1.05. The rest of the total is the GST.

Why is 18% of the MRP not the GST amount?

GST is charged on the base price, not on the tax-inclusive MRP. The tax inside an 18% MRP is 18/118 of it, about 15.25%.

Is IGST higher than CGST plus SGST?

No. IGST is generally equal to the two combined, so the total tax is the same. Only the way it is shown differs.

How is GST rounded off?

Under Section 170 of the CGST Act, to the nearest rupee: 50 paise or more rounds up, less than 50 paise is dropped.

What is the GST on gold?

3%, shown as 1.5% CGST plus 1.5% SGST on a sale within the state.

Sources

• Section 170, CGST Act, 2017: rounding off of tax — CBIC Tax Information Portal (checked 16 Sep 2026)
• Nine Years of GST: rate structure and IGST — PIB (checked 16 Sep 2026)
• GST Concept and Status — CBIC (checked 16 Sep 2026)
• GST rate reforms 2025 — PIB (checked 16 Sep 2026)
• MRP provisions under the Legal Metrology (Packaged Commodities) Rules — PIB (checked 16 Sep 2026)
• Tax invoice and other documents (GST flyer) — GST Council (checked 16 Sep 2026)