What Is GST?
GST (Goods and Services Tax) is a unified indirect tax levied on the supply of goods and services across India. Implemented on July 1, 2017, it replaced a fragmented system of multiple indirect taxes including VAT, Service Tax, Central Excise Duty, CST, and Octroi with a single, destination-based tax structure.
GST is collected at each stage of the supply chain but the tax burden ultimately falls on the final consumer. Businesses can claim input tax credit (ITC) for GST paid on purchases, which eliminates the cascading effect of the old tax-on-tax system.
GST Slabs in India
| GST Rate | Category | Common Examples |
|---|---|---|
| 0% | Exempt / Essential | Fresh vegetables, milk, eggs, cereals, health services |
| 5% | Essential Goods | Packaged foods, transport services, economy hotels |
| 12% | Standard Goods | Processed foods, business services, agarbatti |
| 18% | Standard Services | Most services, electronics, restaurants, software |
| 28% | Luxury / Demerit | Automobiles, tobacco, aerated drinks, luxury hotels |
CGST vs SGST vs IGST
| Tax | Full Form | Collected By | When Applied | Rate |
|---|---|---|---|---|
| CGST | Central GST | Central Government | Intrastate | Half of GST rate |
| SGST | State GST | State Government | Intrastate | Half of GST rate |
| IGST | Integrated GST | Central Government | Interstate | Full GST rate |
For intrastate transactions (buyer and seller in the same state), the GST collected is split equally between CGST and SGST. For interstate transactions, the full GST is collected as IGST by the central government, which then transfers the state's share to the destination state.
GST Calculation Formulas
Adding GST to a Base Amount
GST Amount = Base Amount × GST Rate ÷ 100Final Amount = Base Amount + GST AmountExample: ₹10,000 × 18% = ₹1,800 GST → Total ₹11,800
Removing GST from Inclusive Amount
Taxable Value = Total ÷ (1 + GST Rate ÷ 100)GST Amount = Total − Taxable ValueExample: ₹11,800 ÷ 1.18 = ₹10,000 base → GST ₹1,800
Frequently Asked Questions
Disclaimer: This GST calculator is for informational purposes only. GST rates and rules are subject to change by the GST Council. Always verify applicable rates with the official GST portal (gst.gov.in) or a qualified tax professional before filing returns or issuing invoices.