How to Calculate GST in India: CGST SGST IGST
How to Calculate GST in India: CGST SGST IGST Explained
India's Goods and Services Tax (GST) replaced multiple indirect taxes with a unified system in 2017. But understanding which GST applies—CGST, SGST, or IGST—and calculating the correct amounts can still confuse business owners. Getting it wrong means compliance issues and lost input tax credits.
In this guide, you'll learn exactly how GST works in India, when to apply each type, and how to calculate tax amounts for your invoices. Use our free calculator for instant, accurate GST calculations.
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Enter any amount and GST rate to calculate CGST, SGST, or IGST breakdowns. Add or remove GST from prices instantly.
How It Works: Understanding Indian GST
GST Structure in India:
GST is a destination-based tax with three components:
When each applies:
| Transaction Type | Tax Applied |
|-----------------|-------------|
| Within same state | CGST + SGST (split 50-50) |
| Between states | IGST (full rate) |
| Import | IGST (full rate) |
| Export | Zero-rated (IGST 0%) |
GST Rates: 0%, 5%, 12%, 18%, 28%
For an 18% GST intra-state sale:
For an 18% GST inter-state sale:
Step-by-Step Example: Calculating GST
Scenario 1: Intra-State Sale (Within Maharashtra)
A Mumbai business sells software for ₹50,000 to a Pune customer (same state).
Calculation:
Scenario 2: Inter-State Sale (Maharashtra to Karnataka)
Same ₹50,000 sale, but customer is in Bangalore.
Calculation:
Total tax is the same—only the split differs based on destination.
Key Factors to Consider
1. Input Tax Credit (ITC) Rules
You can claim credit for GST paid on business purchases against GST collected on sales. CGST credit can only offset CGST liability, SGST against SGST, but IGST credit can offset any GST type. Maintain proper invoices to claim ITC.
2. GST Composition Scheme
Small businesses under ₹1.5 crore turnover (₹75 lakhs for services) can opt for composition scheme: pay 1-6% flat tax, but can't collect GST or claim ITC. Best for businesses selling to end consumers.
3. Reverse Charge Mechanism (RCM)
Some transactions require the buyer to pay GST instead of the seller (imports, purchases from unregistered dealers over ₹5,000/day). Under RCM, buyer pays GST and can claim ITC in the same month.
4. E-Invoicing Requirements
Businesses with turnover above ₹5 crore must generate e-invoices through the government portal. This automatically reports transactions for GST filing and prevents mismatches.
Frequently Asked Questions
How do I calculate 18% GST on ₹10,000?
For ₹10,000 at 18% GST: GST amount = ₹10,000 × 0.18 = ₹1,800. Total invoice = ₹11,800. For intra-state: CGST ₹900 + SGST ₹900. For inter-state: IGST ₹1,800.
What is the difference between CGST SGST and IGST?
CGST (Central) and SGST (State) apply together on intra-state sales, split 50-50 between governments. IGST applies to inter-state sales and imports, collected by central government and distributed to destination state.
When should I charge IGST vs CGST/SGST?
Charge CGST + SGST when seller and buyer are in the same state. Charge IGST when they're in different states or for imports. The buyer's billing address determines destination, not delivery address.
Can I claim input credit on IGST paid?
Yes. IGST input credit can be used to offset IGST, CGST, or SGST liability (in that order). It's the most flexible input credit type. CGST credit can only offset CGST, and SGST can only offset SGST.
What is the GST rate for software and IT services?
Software products and IT services attract 18% GST in India. This applies to SaaS subscriptions, software development, IT consulting, and digital products. Some IT exports are zero-rated (0% with refund eligibility).