ToolFoxGST in India Explained: Rates, and Inclusive vs Exclusive
20 September 2026 · 5 min read
GST, the Goods and Services Tax, is the single indirect tax that applies to most goods and services sold in India. It replaced a tangle of older taxes with one system, but it still trips people up in two places: which rate applies, and whether a quoted price already includes the tax. This guide clears up both.
You can do the arithmetic instantly either way with the GST calculator.
The rate slabs
GST is charged at a small number of standard rates, commonly 5%, 12%, 18% and 28%, with 0% (exempt) for many essentials. Everyday items tend to sit at the lower rates, standard goods and most services around the middle, and luxury or "sin" items at the top. The exact rate for a given product is set by the GST Council and can be revised, so check the current rate for anything specific.
CGST and SGST: one tax, two halves
For a sale within a single state, the GST you pay is split into two equal halves: CGST, which goes to the central government, and SGST, which goes to the state. So 18% GST is really 9% CGST plus 9% SGST. For a sale between states, a single IGST is charged instead. As a buyer the total is the same either way — the split only matters for how the tax is routed.
Inclusive vs exclusive prices
A GST-exclusive price is the base price before tax; you add GST on top. A GST-inclusive price already contains the tax, which is how most retail price tags and restaurant bills are shown.
Adding GST is easy: multiply the base by the rate and add it on. Removing GST from an inclusive price is where people slip up — you cannot just subtract the percentage. To find the base price inside an inclusive amount, divide by (1 + rate). For 18% GST, divide the inclusive price by 1.18; the remainder is the tax.
A worked example
Say a product's base price is ₹1,000 and GST is 18%. The tax is ₹180, so the final GST-inclusive price is ₹1,180. Working backwards, if a tag shows ₹1,180 inclusive of 18% GST, dividing by 1.18 gives the ₹1,000 base and confirms ₹180 of tax. The GST calculator does both directions for any rate so you never have to remember which way to divide.