What is GST and how does it work in India?

GST (Goods and Services Tax) is India's unified indirect tax that replaced multiple state and central taxes (VAT, service tax, excise duty, CST etc.) from July 1, 2017. It follows a dual structure: 1. CGST (Central GST): Collected by the Central Government 2. SGST (State GST): Collected by the State Government 3. IGST (Integrated GST): For inter-state transactions, collected by Centre and shared with destination state 4. UTGST (Union Territory GST): For union territories without legislature For intra-state transactions (within same state): GST rate splits equally: e.g. 18% GST = 9% CGST + 9% SGST For inter-state transactions: Full rate as IGST: e.g. 18% GST = 18% IGST How it works — the value chain: Manufacturer → Wholesaler → Retailer → Consumer At each stage, GST is charged on the value added. Each business collects GST from its customers and gets credit (ITC) for GST paid to its suppliers. Only the net amount (output tax − input tax) goes to the government. Result: GST is effectively paid only by the final consumer. Businesses in the supply chain act as tax collectors for the government.

What are the GST rates in India under GST 2.0?

India's GST structure has 7 rate slabs effective from September 22, 2025 (GST 2.0, post-55th GST Council): 0% / Exempt: Food grains (rice, wheat), fresh vegetables, fresh fruits, milk, eggs, curd, salt, books, newspapers, prasad, government services 0.25% (Special): Rough diamonds, precious and semi-precious stones 3% (Special): Gold, silver, processed precious metals, jewellery, imitation jewellery 5%: Packaged food items, edible oils, sugar, tea, coffee, life-saving medicines, footwear up to ₹1,000, economy-class transport 12%: Smartphones, computers, processed/frozen food, construction services, ayurvedic medicines, agarbatti 18%: Most goods and services — restaurants, IT services, software, telecom, financial services, electronics, most FMCG, hair oil, soaps, toothpaste 28%: Luxury and sin goods — motor vehicles, air conditioners, tobacco, cigarettes, aerated drinks, casinos, online gaming, horse racing Additional levies on 28% items: Many 28% items attract an additional Compensation Cess (e.g. cigarettes, luxury cars). This cess is over and above the 28% GST.

What is Input Tax Credit (ITC) and who can claim it?

Input Tax Credit (ITC) is the mechanism that makes GST a value-added tax. It allows GST-registered businesses to claim credit for GST paid on their purchases and offset it against GST payable on their sales. How ITC works: Business A (manufacturer) pays ₹18,000 GST to their raw material supplier. Business A sells goods and collects ₹27,000 GST from their customer. Business A pays only ₹27,000 − ₹18,000 = ₹9,000 to the government. The ₹18,000 was already collected by the government from the raw material supplier. Who can claim ITC: ✓ GST-registered businesses with GSTIN ✓ Composition dealers cannot claim ITC ✓ Only for goods and services used for business purposes ✗ Cannot claim ITC on personal expenses ✗ Cannot claim ITC on blocked credits (motor vehicles for personal use, food, beauty treatment, club memberships) Conditions for claiming ITC: 1. You must have a valid tax invoice or debit note from a registered supplier 2. The supplier must have filed their GSTR-1 (reflected in your GSTR-2B) 3. You must have received the goods or services 4. Payment must be made to the supplier within 180 days 5. ITC must be claimed within the specified time limit ITC surplus: If ITC exceeds output tax, the excess can be carried forward to the next month. In some cases (like exports), a refund can be claimed.

What is the difference between CGST, SGST and IGST?

These are three components of India's dual GST structure: CGST (Central Goods and Services Tax): - Levied by the Central Government - Applied on intra-state (within same state) transactions - Rate = Total GST rate ÷ 2 - Example: 18% GST on ₹1,000 → CGST = ₹90 (9%) goes to Centre - Governed by CGST Act, 2017 SGST (State Goods and Services Tax): - Levied by the State Government - Applied on intra-state transactions alongside CGST - Rate = Total GST rate ÷ 2 (same as CGST) - Example: 18% GST on ₹1,000 → SGST = ₹90 (9%) goes to State - Each state has its own SGST Act IGST (Integrated Goods and Services Tax): - Levied by the Central Government on inter-state transactions - Applies when goods or services cross state borders - Rate = Full GST rate (not split) - Example: 18% GST on ₹1,000 → IGST = ₹180 (18%) goes to Centre - Centre then shares IGST with the destination state - Also applies to imports and exports - Governed by IGST Act, 2017 UTGST (Union Territory GST): - Applied in Union Territories without legislature (Chandigarh, Lakshadweep, Andaman & Nicobar, Dadra & Nagar Haveli, Daman & Diu) - Delhi, Puducherry, Jammu & Kashmir have their own legislatures, so SGST applies there - Rate = Total GST rate ÷ 2 (same as SGST) Practical rule: - Same state transaction → CGST + SGST - Different state transaction → IGST only - Union territory → CGST + UTGST

Who needs to register for GST?

GST registration is mandatory in several situations: Mandatory registration thresholds (FY 2025-26): Goods suppliers: Annual turnover > ₹40 lakh (₹20 lakh in special category states) Service providers: Annual turnover > ₹20 lakh (₹10 lakh in special category states) Special category states: NE states, Uttarakhand, Himachal Pradesh, J&K Mandatory regardless of turnover: - Inter-state supply of goods or services - E-commerce operators and sellers on platforms like Amazon, Flipkart - Casual taxable persons (those with occasional transactions) - Non-resident taxable persons - Those liable to pay tax under reverse charge mechanism - Input service distributors - Those required to deduct TDS under GST Voluntary registration: Any business can voluntarily register even below the threshold — useful for: - Claiming ITC on purchases - Improving credibility with large corporate clients who require GSTIN - Businesses planning to scale above the threshold soon Composition scheme: Businesses with turnover up to ₹1.5 crore (₹75 lakh for services, ₹50 lakh for restaurants) can opt for the Composition Scheme — pay a flat rate (0.5-6% depending on category), simpler compliance, but cannot collect GST from customers or claim ITC. Penalty for not registering: Equal to 10% of tax due, minimum ₹10,000. For deliberate non-registration: 100% of tax due.

India GST Calculator — Add / Remove GST | All Rates | CGST SGST IGST

🇮🇳 GST 2.0 · All rates: 0%, 3%, 5%, 12%, 18%, 28% · Add / Remove GST · CGST + SGST + IGST split · Input Tax Credit

Complete India GST Calculator with all rates under GST 2.0 (effective September 22, 2025): 0%, 3%, 5%, 12%, 18%, 28% plus special rates 0.25% for rough diamonds and 3% for gold. Two modes: Add GST (exclusive — enter price before GST to find total) and Remove GST (inclusive — enter price with GST to ..

CALCULATE GST

CALCULATION MODE

Enter price before GST — GST will be added on top

AMOUNT (BEFORE GST)

₹₹10,000.00

GST RATE

Common items @ 18%

Restaurant diningIT & software servicesTelecom servicesFinancial servicesMost electronics

TRANSACTION TYPE

Within same state — split equally as CGST + SGST

GST @ 18% · EXCLUSIVE · INTRASTATE

BASE AMOUNT

₹10,000.00

GST AMOUNT

₹1,800.00

TOTAL AMOUNT

₹11,800.00

GST COMPONENT SPLIT

CGST9% (Central Goods & Services Tax)

₹900.00

SGST9% (State Goods & Services Tax)

₹900.00

FULL BREAKDOWN

Amount entered (excl. GST)	₹10,000.00
Base amount (before GST)	₹10,000.00
GST @ 18%	₹1,800.00
CGST @ 9%	₹900.00
SGST @ 9%	₹900.00
Total amount (incl. GST)	₹11,800.00

AMOUNT SPLIT

85% base

18% GST

GST RATE CHART — GST 2.0 (EFFECTIVE SEP 22, 2025)

Rate	CGST	SGST/UTGST	IGST	Common Items
0%	0%	0%	0%	Food grains, fresh vegetables, milk, eggs, salt, books, news...
5%	2.5%	2.5%	5%	Packaged food, edible oil, sugar, tea, coffee, medicines, ec...
12%	6%	6%	12%	Processed food, computers, mobiles, ayurvedic medicines, con...
18%	9%	9%	18%	Most goods & services — IT, telecom, financial services, res...
28%	14%	14%	28%	Luxury — cars, ACs, tobacco, aerated drinks, casinos, online...
3%	1.5%	1.5%	3%	Gold, silver, processed precious metals, jewellery
0.25%	0.125%	0.125%	0.25%	Rough diamonds, precious stones

Click any row to calculate at that rate · CGST goes to Central Government · SGST goes to State Government · IGST collected by Centre, shared with destination state

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India GST Calculator · GST 2.0 (effective Sep 22, 2025) · Rates: 0%, 3%, 5%, 12%, 18%, 28% · CGST + SGST (intra-state) · IGST (inter-state) · For informational purposes only.