GST rates explained: 5%, 12%, 18%, 28% — what falls where
A no-jargon guide to India's GST rate structure, the difference between CGST/SGST and IGST, and how to compute GST on any invoice in seconds.
👉 Try this now: Use our free GST Calculator to add or remove GST on any invoice instantly with the correct CGST/SGST or IGST split — runs in your browser, no signup.
India's GST rate slabs
The Goods and Services Tax replaced a maze of central and state taxes in July 2017. It applies to almost every sale of goods and services in India, organised into five main slabs:
- 0% — fresh fruits and vegetables, milk, fresh fish, fresh meat, eggs, bread, salt, books, newspapers, postal services, education, healthcare
- 5% — packaged food, branded paneer, edible oils, agarbatti, life-saving drugs, footwear under ₹1,000, economy-class air tickets
- 12% — processed food, butter, ghee, mobile phones (until late 2025), cheese, frozen vegetables, ayurvedic medicines, business-class flights, tickets for circus and theatre
- 18% — most goods and services, restaurant bills, telecom, software, AC and refrigerators (until rate revisions), capital goods, industrial intermediaries, salon and spa services, IT services, branded apparel above ₹1,000
- 28% — luxury and "sin" items: cars, motorcycles above 350cc, tobacco products, aerated drinks, premium hotels above ₹7,500/night, casino services
Rates do change. The official source is the GST Council's notifications on cbic.gov.in. For specific products, look up your HSN (Harmonised System of Nomenclature) code — every product has one.
CGST + SGST versus IGST
India runs a dual GST system. The total rate is the same, but who collects it depends on whether the buyer and seller are in the same state.
Intra-state sale (buyer and seller in the same state): the total rate splits equally. An 18% sale becomes 9% CGST (collected by the central government) plus 9% SGST (collected by the state government). A Mumbai-to-Mumbai laptop sale at 18% on ₹50,000 generates ₹4,500 CGST and ₹4,500 SGST.
Inter-state sale (buyer and seller in different states): the entire tax is charged as IGST (Integrated GST), collected by the central government, which later shares it with the destination state. A Bangalore-to-Mumbai laptop sale at 18% on ₹50,000 generates ₹9,000 IGST. Same buyer cost, different revenue split for governments.
The two GST formulas you'll ever need
Adding GST to a base price
GST = Base × Rate ÷ 100
Final = Base + GST
Example: a manufacturer sells goods worth ₹10,000 at 18% GST. GST = ₹1,800 ; Final invoice = ₹11,800.
Removing GST from a tax-inclusive price
Base = Final ÷ (1 + Rate ÷ 100)
Example: a restaurant bill is ₹2,360 with 18% GST included. Base = 2360 ÷ 1.18 = ₹2,000 ; GST = ₹360. This is what every GST calculator quietly does in "Remove GST" mode.
Common GST mistakes to avoid
- Charging GST when you're not registered. If your annual turnover is below ₹40 lakh (₹20 lakh for services), GST registration is optional — but if you choose to charge it, you must register and remit it.
- Forgetting reverse charge. Some services (legal, security, GTA) require the buyer, not the seller, to pay GST.
- Mixing up CGST/SGST and IGST. Always check the buyer's and seller's GSTIN state codes — first two digits identify the state.
- Missing the place of supply rules. For services like training or consultancy, place of supply rules can override the buyer's address.
Related reading
- GST Calculation Examples Step-by-Step
- GST for Small Business Guide
- Common GST Mistakes to Avoid
- What is SIP? Beginner Guide
Try the related calculator
Compute GST instantly — try our free GST Calculator. Need to compute the percentage change between two prices? Use the Percentage Calculator.