How to calculate GST on a bill (with simple examples)

GST maths is simple once you know two formulas: adding GST to a price, and pulling GST out of a price that already includes it. Here is both, with examples.

Step 1: Know the rate

First find the GST rate for the item from its HSN code (0, 5, 18 or 40 percent). Everything follows from the correct rate.

Step 2: Add GST to a base price

GST amount = base price times rate. Total = base price plus GST. Example: base 1000 at 18 percent, GST = 180, total = 1180.

Step 3: Extract GST from an inclusive price

If a price already includes GST, base = inclusive price times 100 divided by (100 plus rate). Example: 1180 inclusive at 18 percent, base = 1180 times 100/118 = 1000, GST = 180.

Step 4: Split into CGST and SGST for local sales

For a sale within your state, split the GST equally: 18 percent becomes 9 percent CGST plus 9 percent SGST. On 1000, that is 90 plus 90.

Step 5: Use IGST for inter-state sales

For a sale to another state, the whole rate is IGST: 18 percent IGST = 180, no split.

Step 6: Let your billing tool do it

On a multi-item invoice, doing this by hand invites errors. Billing software applies the right rate and split per line automatically.

Frequently asked questions