GST Explained Simply: CGST, SGST, IGST and How to Calculate GST
A simple explanation of GST in India: what CGST, SGST and IGST mean, how to add GST to a price, how to remove GST from an inclusive price, with clear examples.
2 November 2026 3 min read
What GST is
GST, or Goods and Services Tax, is the indirect tax charged on most goods and services sold in India. It replaced many older taxes such as VAT, service tax and excise duty on most items. GST is collected at each stage of the supply chain, and registered businesses can usually claim credit for the GST they paid on their purchases.
For a small business owner or a student learning accounts, the two most useful skills are knowing which type of GST applies and being able to add or remove GST from a price correctly.
CGST, SGST and IGST
The type of GST depends on where the supplier is and where the supply goes.
For an intra-state sale, where the seller and the place of supply are in the same state, the GST is split equally into CGST (Central GST) and SGST (State GST). In union territories without their own legislature, UTGST is used in place of SGST.
For an inter-state sale, where the place of supply is in a different state, a single IGST (Integrated GST) is charged at the full rate.
- Intra-state at 18 percent: 9 percent CGST + 9 percent SGST
- Inter-state at 18 percent: 18 percent IGST
- The total tax is the same; only the split and the government that receives it differ
GST rates
The commonly used GST slabs have been 5, 12, 18 and 28 percent, with some items exempt or charged at special rates. Rates are decided by the GST Council and can change, and rates for specific items have been revised from time to time.
Because of this, do not rely on memory or an old list for the rate on a particular product or service. Check the current rate on the official GST portal, a recent government notification, or with your tax consultant before you raise an invoice.
How to add GST to a price
If your price is exclusive of GST, multiply it by the GST rate to get the tax, then add it.
Example: a service is priced at Rs 1,000 and GST is 18 percent. GST = 1,000 x 18 / 100 = Rs 180. The final price is Rs 1,180.
If this is an intra-state sale, the invoice would show CGST Rs 90 and SGST Rs 90. If it is inter-state, it would show IGST Rs 180.
How to remove GST from an inclusive price
This is where many people make mistakes. If a price already includes GST, you cannot simply subtract 18 percent of it.
The correct method is: base price = inclusive price x 100 / (100 + GST rate). Then GST = inclusive price - base price.
Example: a product costs Rs 1,180 including 18 percent GST. Base price = 1,180 x 100 / 118 = Rs 1,000. GST = 1,180 - 1,000 = Rs 180.
If you had wrongly taken 18 percent of 1,180, you would get Rs 212.40, which is incorrect.
- Add GST: price x (100 + rate) / 100
- Remove GST: price x 100 / (100 + rate)
- Split for intra-state: half CGST, half SGST
Practical tips for small businesses
Always state clearly on quotations whether prices are inclusive or exclusive of GST, so the customer is not surprised later. Round off consistently and show the tax amount separately on invoices, as required.
The Filyzo GST Calculator lets you add or remove GST at any rate and shows the CGST, SGST or IGST split, which is handy for quick checks while billing. For registration, filing, input tax credit or any question about which rate applies to your business, consult a qualified tax professional or the official GST resources, since the rules are detailed and do change.