How to remove GST from a price, and what CGST, SGST and IGST mean
Last updated 2026-10-05
A shop bill says Rs 2,499 including GST and you want the price before tax. The common instinct, taking the GST percentage off the total, gives the wrong answer. This guide shows the right method and how the tax is then divided.
Why subtracting the percentage is wrong
GST is added to the pre-tax price, so the total is the pre-tax price times 1 plus the rate. Taking the rate off the total uses a different base. At 18%, a price of Rs 1,180 includes Rs 180 of tax on a base of Rs 1,000. Taking 18% of Rs 1,180 gives Rs 212.40, which overstates the tax by about Rs 32.
The error grows with the rate. At 40%, a Rs 10,000 inclusive price contains Rs 2,857.14 of tax, not Rs 4,000.
The method: divide by 1 plus the rate
Pre-tax price = inclusive price ÷ (1 + rate). The tax is the difference. For Rs 2,499 including 5%: 2,499 ÷ 1.05 = Rs 2,380, so the GST is Rs 119. For Rs 25,000 including 12%: 25,000 ÷ 1.12 = Rs 22,321.43 and the tax is Rs 2,678.57.
To go the other way and add GST, multiply by 1 plus the rate: Rs 50,000 at 18% is Rs 59,000, of which Rs 9,000 is tax.
CGST, SGST and IGST
The total rate is the same however the sale is classified; what changes is who receives the tax. When goods or services move within one state, the rate is split equally between the Centre (CGST) and the state (SGST), so an 18% item carries 9% plus 9%. When they move between states, the whole rate is charged as IGST.
On Rs 9,000 of tax from a Rs 50,000 sale, that is Rs 4,500 CGST plus Rs 4,500 SGST inside the state, or Rs 9,000 IGST to a buyer in another state. The invoice total is Rs 59,000 either way.
Which rate applies
Since 22 September 2025 most goods and services fall into two main slabs, 5% and 18%, with 40% for a short list of luxury and sin goods, while gold stays at 3%. Older invoices may show 12% or 28%. A calculator only does the arithmetic: which rate applies to a particular item depends on its classification in the official GST schedule, and some supplies are exempt, so confirm against the schedule or with your accountant before filing.
Checking a supplier invoice
Calculate GST line by line, since it is charged per item, then add up. A rupee or two of difference against an invoice is usually rounding on individual lines. A larger gap means the wrong rate or a base that already included tax.