GST in India Explained (Simply)
The Goods and Services Tax (GST) is a single indirect tax that replaced a tangle of older taxes like VAT, service tax and excise. It applies to most goods and services in India and is charged as a percentage of the price.
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The GST rate slabs
| Rate | Typical items |
|---|---|
| 0% | Essential food grains, fresh produce, some basics |
| 5% | Packaged essentials, economy transport |
| 12% | Processed foods, some electronics |
| 18% | Most services and goods (the common rate) |
| 28% | Luxury and "sin" goods |
CGST, SGST and IGST
GST is split depending on whether the sale is within a state or across states:
- Intra-state sale: the rate is divided equally into CGST (central) and SGST (state). An 18% GST = 9% CGST + 9% SGST.
- Inter-state sale: a single IGST at the full rate (e.g. 18%) is charged instead.
How to calculate GST
To add GST to a base price: GST amount = price × rate ÷ 100. So ₹1,000 at 18% adds ₹180, making the total ₹1,180.
To remove GST from a GST-inclusive price: base = inclusive ÷ (1 + rate ÷ 100). So ₹1,180 inclusive at 18% gives a base of ₹1,000 and ₹180 GST. The calculator does both directions instantly.
Who needs to register for GST?
Businesses generally must register once turnover crosses the threshold (commonly ₹40 lakh for goods and ₹20 lakh for services, lower in some states). Registered businesses can claim input tax credit on the GST they pay on purchases.
FAQs
Is 18% the standard GST rate?
It's the most common rate for services and many goods, but the correct rate depends on the specific item's classification.
Can I get a GST-inclusive and exclusive figure?
Yes — the GST Calculator shows base price, GST amount and total for both add and remove modes.
Open the GST Calculator →