India’s Goods and Services Tax groups goods and services into four main slabs — 5%, 12%, 18% and 28% — with a handful of exempt or special-rated items outside them. Knowing which slab a product falls in matters less at the calculator and more at invoicing time, because the tax you charge has to be split into two halves and the split depends on where you sell to.
The slabs at a glance
- 0% — exempt essentials such as fresh produce, education and healthcare.
- 5% — necessaries like packaged food staples and some household goods.
- 12% — a mixed band covering processed food and lower-cost services.
- 18% — the default for most goods and services, from electronics to restaurants.
- 28% — luxury and sin items: cars, tobacco and high-end appliances.
Despite the folklore, the slab a product lands in is decided by official notifications tied to its HSN (Harmonized System Nomenclature) code. Guessing is risky: the difference between 18% and 28% on a high-value item is substantial, so use the government’s official rate finder when a purchase is significant.
CGST + SGST, or IGST
Within a single state, GST is split equally between the centre and the state: 18% becomes 9% CGST plus 9% SGST, both shown separately on the invoice. When goods cross a state border — or are sold online across states — the full amount is charged as one IGST, which the centre later distributes to the destination state. An invoice template shows all three lines, but only the correct pair will appear on any given transaction.
Adding and removing GST
The arithmetic mirrors VAT: multiply the base price by (1 + rate) to add GST, and divide an inclusive price by (1 + rate) to extract it. On ₹1,000 at 18%, adding yields ₹1,180 total with CGST ₹90 + SGST ₹90. Extracting 18% from an inclusive ₹1,180 gives ₹1,000 base. The removing step trips people up the same way VAT does — do not subtract 18% of the inclusive price; divide by 1.18.
total = base × (1 + rate) base = inclusive ÷ (1 + rate) cgst = sgst = gst / 2 (intra-state)
On an invoice, the base line, the GST line and the total line must all be correct on their own, because buyers claim input credit from the figures printed there. That is why a GST calculator shows the base, tax and total together and exposes the CGST/SGST split for intra-state supplies, with a custom rate available for the 10% Australian, 15% New Zealand and 9% Singapore versions of the same idea.
