How to Calculate GST?

GST or Goods & Services Tax is a tax that was introduced by the Government of India after 2016 which basically combined all the taxes such as VAT, excise duty, sales tax, etc., into one single taxation system.

It is one of the major reforms in taxation which help the India Economy and businesses in doing business. Currently, GST has a lot of products and services included in its list and the government has planned to increase the production base for wider application of GST in the country.

In GST, all the parties involved in the transaction i.e., sales or purchase of the Goods or Services pay GST and at the time of computation of the GST could claim GST returns as a refund.

Now, the major question that might arise is how to calculate GST. in this article, we will discuss has to calculate GST, the types of GST, etc.

How to Calculate GST

Types of GST

Goods and Services Tax or GST is a tax implied on the goods and services sold in India. The tax charged by the Government is distributed among the state and the center depending on where the item has been manufactured. The central government’s cut and the state government cut from the taxes are the bases on which GST is divided.

The following are the types of GST that are collected under the GST act-

  • SGST
  • CGST
  • IGST


SGST stands for State Goods and Services Tax which is a tax amount that is collected by the State Governments as their revenue.


CGST stands for Central Goods and Services tax which is collected by the Central Government.


CGST stands for Integrated Goods and Services tax which is collected by the Central Government for inter-state transactions and imports.


UTGST stands for Union Territory Goods and Services tax which is collected by the Government in the Union Territory of India.

How is GST Calculated?

Whenever someone pays GST, the tax will be divided into two halves,  one half goes to the Central Government and the other half goes to the State or Union Territory Government.

In case there had been importing or transfer of goods within the states then, in that case, IGST will be levied instead of SGST or UTGST.

For Example- let’s say you bought a pen in Delhi for Rs.10/- then the application GST on it will be 12%. So, the total amount of GST taxed on you will be Rs.1.2/-.

Out of Rs.1.2/-, Rs.0.6 will be for the Central Government, and the other half i.e., Rs.0.6/- will be for the Delhi Government.

GST Calculation Formula

The formula to calculate GST is as follows-


GST Amount = (Original Cost x GST%)/100

Net Price = Original Cost + GST Amount

Remove GST:

GST Amount = Original Cost – [Original Cost x {100/(100+GST%)}]

Net Price = Original Cost – GST Amount.

GST Rates in India

The following are the GST rates on some of the items that you can purchase in India-

CategoryNew GST Rates
Railways Goods and Parts under Chapter 8618%
Metal Concentrates and Ores18%
Certain Renewable Energy Devices12%
Recorded media reproduction and print18%
Broadcasting, sound recordings, and licensing18%
Printed material18%
Packing containers and boxes18%
Scrap and polyurethanes18%
If vehicles are equipped with retrofitting kits for disabled people,5%
Keytruda for cancer5% 
IGST is levied on goods sold at the Indo-Bangladesh borderNIL
Packed Paneer5%
Edible Oils5%
Domestic LPG5%
Roasted Coffee Beans5%
PDS Kerosene5%
Skimmed Milk Powder5%
Cashew Nuts5%
Footwear (< Rs.500)5%
Milk Food for Babies5%
Apparel (< Rs.1000)5%
Coir Mats, Matting & Floor Covering5%
Mishti/Mithai (Indian Sweets)5%
Life-saving drugs5%
Coffee (except instant)5%
Processed food12%
Fruit Juice12%
Preparations of Vegetables, Nuts Fruits, or other parts12%
Packed Coconut Water12%
Hair Oil18%
Capital goods18%
Industrial Intermediaries18%
Corn Flakes18%
Small cars (+1% or 3% cess)28%
High-end motorcycles (+15% cess)28%
Consumer durables such as AC and fridge28%
Beedis are NOT included here28%
Luxury & sin items like BMWs, cigarettes28%
and aerated drinks (+15% cess)28%

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