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How to Calculate GST in India with an Example

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Created on
May 11, 2023


What’s Inside

Since its introduction, GST has brought significant benefits to the Indian economy by simplifying the tax system, reducing the tax burden on businesses and consumers, and boosting tax revenues. The implementation of GST – was a significant reform that created a uniform tax rate across the country. This made it easier for businesses to operate and compete in the national market and move goods seamlessly.

If you are a  goods or service provider, you should know how to calculate the GST percentage to ensure you pay the right amount to the government. Paying less than due can lead to penalties and fines, adding to your operational expenses. Calculating the GST amount and percentage is simple and can be done both manually or by using online calculators. Whichever mode you choose, you still need to understand how to calculate GST as a concept and use its formula.

How to calculate GST manually?

GST is a component that may already be included in the quoted price or may need to be added over and above the quoted price. This information is critical so that you don’t end up with a result that is lower or higher than the actual GST that was supposed to be added.

If the price you have is exclusive of the GST, in other words, GST needs to be added over it, then the formula is:

GST Amount = (Cost Amount x GST Rate Percentage) / 100

On the other hand, if the price you have is inclusive of the GST, then a different formula needs to be used:

GST Amount = GST Inclusive Price – [GST Inclusive Price x {100/(100+GST%)}]

If you are wondering how to calculate the GST on MRP, then simply replace the GST-inclusive price with the maximum retail price in the above-mentioned formula. However, do confirm beforehand that the MRP includes the GST component.


Here’s an example of how to calculate GST manually.

GST Exclusive:

Let us assume you need to calculate GST for a product that falls under the 5% GST slab and has a cost amount of ₹ 1,00,000. Then using the formula (Cost Amount x GST Rate Percentage) / 100, we get 1,00,000 x 0.05 = ₹ 5,000. By adding this to the original price, you get the net price which should be ₹ 1,05,000.

GST Inclusive:

In case you have a price that already includes GST, the tax calculation for the above-mentioned example will be such:

GST Inclusive Price – [GST Inclusive Price x {100/(100+GST%)}]

1,00,000 - [1,00,000 x {100/(100+5%)}] = ₹ 4,762. If you deduct the derived GST from the inclusive price, the original cost amount will be 1,00,000 - 4,762 = ₹ 95,238.

How to calculate GST using an online calculator?

A free-to-use online GST calculator is a tool that can save you significant time and effort while ensuring accurate results. Here are the steps you need to follow:

  • Visit the webpage of the online GST calculator
  • Choose between GST exclusive or GST inclusive calculation
  • Select the GST slab applicably
  • Enter the amount/price on which GST is to be calculated

That’s it, the tool will automatically calculate the GST amount applicable.


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Frequently Asked Questions

1.What is a GST Calculator?

A GST calculator is a tool that can help calculate the GST component that is added or to be added over the price of a product or service. Typically, all you need to do is enter the amount and the GST slab the particular item falls under and choose the inclusive/exclusive option as applicable. Immediately, you can see the GST amount saving you a lot of time and the complication of doing manual calculations. Moreover, you eliminate the risk of inaccuracies and errors that manual calculations are prone to.

2.What is the GST-exclusive amount?

When you have a product or service that falls under a particular slab but does not include the GST component in its price, it is known as being GST exclusive. Using the information in this article, you can calculate the GST due and add it to the original cost to derive the net cost. The formula to do so is (Cost Amount x GST Rate Percentage) / 100.


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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