How the GST calculator works
India’s Goods and Services Tax (GST) replaced a tangle of central and state indirect taxes in July 2017. Every domestic supply now attracts a single combined rate that splits between Central GST (CGST) and State GST (SGST) for sales within the same state, or rolls up into Integrated GST (IGST) for sales that cross state lines. This calculator does both directions of the maths—adding GST to a base amount (forward / exclusive) or extracting GST from an MRP (reverse / inclusive)—at every standard CBIC rate.
Standard GST rates (FY 2026-27)
- 0% — exempt: fresh produce, milk, books, education, healthcare
- 0.25% — rough diamonds (HSN 7102)
- 3% — gold, silver, jewellery (HSN 7108-7114)
- 5% — essentials, branded grain, small restaurants, footwear < ₹1,000
- 12% — processed food, business-class air travel, some textiles
- 18% — the standard rate covering most services and B2B supplies
- 28% — luxury and sin goods: cars, ACs > 1.5 ton, cement, tobacco, aerated drinks
A handful of 28% goods also attract an additional compensation cess of 1%–290% for very high-tax items like chewing tobacco and pan masala. This calculator’s “cess (%)” field lets you add it on top of the base rate when needed.
Composition scheme
Small dealers below ₹1.5 crore turnover (₹50 lakh for services) can opt for the composition scheme: a flat tax on turnover with no input tax credit. Three rates apply:
- 1% — traders and manufacturers
- 5% — restaurants
- 6% — service providers (turnover ≤ ₹50L)
Forward (exclusive) calculation
When a vendor quotes a base price and you need to know the final invoice value, use the forward mode:
Total payable = base + (base × rate / 100)
Example: a software invoice of ₹1,00,000 at 18% GST attracts ₹18,000 of GST and totals ₹1,18,000. For an intra-state supply that splits as ₹9,000 CGST + ₹9,000 SGST. For an inter-state supply, the full ₹18,000 is charged as IGST.
Reverse (inclusive) calculation
When you have the MRP or final invoice value and need to back out the base and the GST component (useful for input-tax-credit working, accounting reconciliation, or comparing pre-GST and post-GST quotes):
Base = gross / (1 + rate / 100) GST = gross − base
Example: an MRP of ₹1,18,000 inclusive of 18% GST gives a base of ₹1,00,000 and GST of ₹18,000. Round-tripping forward then reverse recovers the original base to within ₹1 (the only drift is rupee rounding at each step).
Intra-state vs inter-state
The split between CGST and SGST is purely a tax-administration concern (collected centrally then shared with states); the customer pays the same amount either way. The choice depends on the “place of supply” rules under Sections 10–13 of the IGST Act:
- Intra-state — supplier and recipient in the same state → CGST + SGST, each at half the headline rate.
- Inter-state — supplier and recipient in different states (or imports / exports) → IGST at the full headline rate.
Special cases: supplies to and from Special Economic Zones are zero- rated; exports are zero-rated with refund of input tax credit; supplies under Reverse Charge Mechanism (RCM) shift the GST liability from the supplier to the recipient (e.g., legal services, GTA freight).
Discount handling
Trade discounts shown on the invoice before GST reduce the taxable value. Cash discounts after GST do not—they only reduce what the customer pays. Our discount field implements the trade-discount treatment. For a ₹10,000 sale at 18% GST with a ₹1,000 trade discount:
- Taxable value = ₹10,000 − ₹1,000 = ₹9,000
- GST @ 18% = ₹1,620
- Total payable = ₹10,620
Composite vs mixed supply
When two or more supplies are bundled, GST law distinguishes:
- Composite supply — one principal supply with others naturally bundled (laptop + warranty); the principal’s rate applies to the whole.
- Mixed supply — multiple independent supplies sold for a single price (gift hamper); the highest rate among them applies to the whole.
This matters for invoices: misclassifying a mixed supply as composite can under-collect GST and create input-tax-credit mismatches at downstream filings.
HSN code ↔ rate mapping
Every taxable supply must carry an HSN (Harmonised System Nomenclature) code on the invoice. Two-digit HSN is mandatory below ₹5 crore turnover; four-digit for ₹5 crore and above; six-digit for export and SEZ supplies. The code determines the rate—always cross-check against the latest CBIC rate notification (notifications 1/2017-CT(R) through the latest GST Council meeting).
Frequently asked questions
- Is GST charged on the discount or on the gross?
- On the post-discount value when the discount is shown on the invoice (Section 15 valuation rules). Discounts given separately via credit note still reduce taxable value if the recipient reverses corresponding ITC.
- Why does my invoice show CGST and SGST instead of IGST?
- Because the place of supply is in the same state as the supplier’s registered address. If you ship to a different state, the same supplier should issue an IGST invoice for that consignment.
- When is GST 0% vs nil-rated vs exempt?
- All three result in no GST being collected from the customer, but the input-tax-credit treatment differs: zero-rated (exports / SEZ) allows full ITC refund; nil-rated and exempt do not allow ITC on inputs used.
- How accurate is this calculator?
- Every result is computed with high-precision decimal arithmetic and cross-checked against CBIC published rate notifications and the ClearTax HSN finder. Sixteen real-world fixture rows and 300+ property-based assertions run on every commit.
Sources
- CBIC notifications 1/2017-CT(R) and amendments (
cbic-gst.gov.in) - GST Council meeting decisions (
gstcouncil.gov.in) - IGST Act 2017, Sections 10–13 (place of supply)
- CBIC Compensation Cess (Rate) notifications
Disclaimer. MoneyKit results are for informational purposes only and should not be construed as tax advice. HSN classification, place-of-supply determination, and input tax credit eligibility require professional judgement—consult a Chartered Accountant or GST practitioner for binding decisions.