What are the different GST rates in India?

India has four main GST slabs: 5% (essential items like packaged food), 12% (processed food, computers), 18% (most goods and services including restaurants, IT services), and 28% (luxury items, automobiles, tobacco). Some items like fresh food are GST-exempt (0%).

How to calculate GST from inclusive price?

To extract GST from an inclusive price: Base Price = Total Price / (1 + GST Rate/100). For example, if total is Rs. 118 with 18% GST: Base = 118/1.18 = Rs. 100, GST = Rs. 18.

What is CGST, SGST, and IGST?

For intra-state transactions, GST is split equally into CGST (Central GST) and SGST (State GST). For inter-state transactions, IGST (Integrated GST) is charged at the full rate. The total tax amount remains the same.

Is GST applicable on all products?

No, some items are exempt from GST including fresh fruits, vegetables, milk, eggs, unprocessed food grains, and certain healthcare and educational services. Petroleum products are also currently outside GST.

GST Calculator: Calculate GST Online

Q: What is Input Tax Credit (ITC)?

Input Tax Credit allows businesses to reduce their GST liability by claiming credit for GST paid on purchases. This prevents the cascading effect of tax-on-tax that existed before GST.

What is GST?

Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. Introduced on July 1, 2017, GST replaced multiple cascading taxes like VAT, Service Tax, Excise Duty, and Octroi with a single, unified tax structure.

GST is a destination-based tax, meaning tax is collected by the state where goods are consumed, not where they are manufactured. This ensures fairer distribution of tax revenue among states.

GST Calculation Formulas

                        Adding GST (Exclusive):

                        Total = Base Price × (1 + GST Rate/100)

                        Extracting GST (Inclusive):

                        Base Price = Total Price / (1 + GST Rate/100)

                        GST Amount = Total Price - Base Price

GST Exclusive vs Inclusive

GST Exclusive: The price shown is before tax. GST is added on top.
Example: ₹100 + 18% GST = ₹118
GST Inclusive: The price shown already includes tax.
Example: ₹118 inclusive of 18% GST means Base Price = ₹100, GST = ₹18

GST Tax Slabs in India (2026)

Rate	Items Covered
0%	Fresh vegetables, fruits, milk, eggs, bread, salt, books
5%	Packaged food, tea, coffee, edible oil, medicines, economy air travel
12%	Processed food, computers, mobiles, business class air travel
18%	Most goods and services: electronics, restaurants, IT services, telecom
28%	Luxury items: cars, tobacco, aerated drinks, cement, AC

CGST, SGST, and IGST Explained

CGST (Central GST): Tax collected by the Central Government on intra-state sales.
SGST (State GST): Tax collected by the State Government on intra-state sales.
IGST (Integrated GST): Tax collected by the Central Government on inter-state sales, later shared with destination state.

Example: On an intra-state sale of ₹100 with 18% GST, you pay 9% CGST (₹9) + 9% SGST (₹9). For inter-state, you pay 18% IGST (₹18).

Frequently Asked Questions (FAQs)

What is Input Tax Credit (ITC)?

ITC allows businesses to claim credit for GST paid on purchases against the GST collected on sales. This prevents tax cascading (tax-on-tax) and reduces the final cost for consumers.

Which items are exempt from GST?

Essential items like fresh food, healthcare, education, and certain financial services are GST-exempt. Petroleum products (petrol, diesel) are currently outside GST and taxed separately by states.

How is GST on restaurants calculated?

Non-AC restaurants charge 5% GST (no ITC). AC restaurants and those in hotels charge 5% GST (no ITC) or 18% GST (with ITC) depending on the pricing structure.

What is Reverse Charge Mechanism (RCM)?

Under RCM, the buyer pays GST directly to the government instead of the seller. This applies to certain specified goods/services and imports.

How to file GST returns?

GST returns are filed online through the GST Portal (gst.gov.in). GSTR-1 (outward supplies) is filed monthly/quarterly, and GSTR-3B (summary return) is filed monthly.