Understanding GST Slabs in India
India's GST system uses four main tax slabs: 5% for essential goods, 12% for processed foods and computers, 18% for most services and manufactured goods, and 28% for luxury items. Some products are zero-rated or exempt.
Every business invoice must clearly show the base amount, GST amount, and total. Getting this wrong leads to compliance issues, incorrect returns, and customer disputes.
GST Exclusive vs Inclusive Calculation
GST Exclusive (tax added on top): GST Amount = Base × Rate ÷ 100. Used in B2B invoicing.
GST Inclusive (tax already in price): Base = Total ÷ (1 + Rate ÷ 100). Used for retail MRP pricing.
Use our free GST Calculator to compute both modes instantly.
Real Invoice Examples
Example 1 — 18% Exclusive: Base ₹10,000 + GST ₹1,800 = Total ₹11,800
Example 2 — 5% Inclusive: MRP ₹105 includes ₹5 GST on ₹100 base
Example 3 — Mixed rates: Calculate each item separately if rates differ, then sum totals.
Common GST Calculation Mistakes
Applying the wrong slab rate, confusing inclusive with exclusive pricing, forgetting to round to two decimal places, and not separating CGST/SGST for inter-state vs intra-state transactions are the most common errors.
Always verify calculations with a dedicated GST calculator before finalizing invoices.
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