Adding GST and removing it are not the same sum
This trips people up constantly. Adding 18 percent to ₹1,000 gives ₹1,180. But removing 18 percent from ₹1,180 is not ₹1,180 minus 18 percent, which would give ₹967.60. It is ₹1,180 divided by 1.18, which gives ₹1,000.
If you quote prices inclusive of tax, the second calculation is the one you need to know what you actually earned. Getting it wrong overstates your income and understates the tax you owe.
CGST, SGST, and IGST
The total tax is the same either way. Only the split changes, and the split is decided by whether the supply crosses a state border.
- Within one state: the rate splits into two equal halves, CGST to the centre and SGST to the state. An 18 percent supply becomes 9 percent CGST and 9 percent SGST.
- Across states: a single IGST line at the full 18 percent.
What decides it is the place of supply against the supplier's own state, not where the buyer's head office is. For goods, the place of supply is normally where they are delivered. For services, the rules vary by service type, and if you are near that line it is worth asking an accountant rather than guessing.
The slabs
GST uses 0, 5, 12, 18, and 28 percent, with a cess on a small set of goods such as tobacco and some vehicles. This calculator does not handle cess.
The rate follows the goods or service, not the business, so a single invoice can carry several rates. That is why the invoice generator lets you set the rate per line rather than once for the whole document.
Rounding
Tax is worked out per line and rounded to paise. When a total is halved into CGST and SGST and lands on an odd paisa, the extra paisa goes to SGST so the two halves always add back to the exact total. Invoice totals are then rounded to the nearest rupee with a visible rounding line. Mismatched paise are one of the more common reconciliation complaints, and they come from tools that round only at the end.
Related
This calculator is not tax advice and does not guarantee compliance. Confirm anything that matters with a chartered accountant.