Calculate Sales Tax by adding it to a net price, or reverse-calculate the tax to find the pre-tax amount.
What is Goods and Services Tax (GST)?
Goods and Services Tax (GST) is an indirect tax used in India and other countries on the supply of goods and services. It is a comprehensive, multi-stage, destination-based tax: comprehensive because it has subsumed almost all the indirect taxes (except a few state taxes), multi-staged as it is imposed at every step in the production process, and destination-based since it is collected from the point of consumption rather than the point of origin.
Types of GST in India
CGST
Central Goods and Services Tax: Collected by the Central Government on intra-state supply of goods and services (e.g., transaction within the same state).
SGST / UTGST
State Goods and Services Tax: Collected by the State Government or Union Territory on intra-state supply of goods and services.
IGST
Integrated Goods and Services Tax: Collected by the Central Government for inter-state supply of goods and services (e.g., transaction between two states).
GST Calculation Formulas
GST Amount = (Net Price * GST Rate) / 100Total Price (Gross) = Net Price + GST Amount
Original Price (Net) = Gross Price / (1 + (GST Rate / 100))GST Amount = Gross Price - Original Price
GST Slabs in India
The GST council has structured products and services into five main tax slabs for collection:
| GST Rate | Applicable Category / Examples |
|---|---|
| 0% (Exempted) | Basic necessity items like fresh fruits, vegetables, milk, eggs, salt, newspapers, etc. |
| 5% | Household necessity items like sugar, edible oil, spices, tea, coffee, life-saving drugs, etc. |
| 12% | Processed food, butter, cheese, ghee, computers, mobile phones, business class air travel, etc. |
| 18% | Hair oil, toothpaste, soaps, restaurants, IT services, financial services, telecom services, etc. (Standard rate for most goods/services) |
| 28% | Luxury and demerit goods like cars, motorcycles, cement, tobacco, aerated drinks, high-end electronics, etc. |
How it Works & Formula
Calculates the sales tax amount and total cost of retail goods based on local tax rates.
Practical Examples
An item priced at $80 in a state with 8.25% sales tax costs a total of $86.60.
Frequently Asked Questions
Tax-exclusive means tax is added to the listed price at checkout. Tax-inclusive means the listed price already contains the tax amount.
VAT is a consumption tax applied at each stage of production and distribution. It is used in Europe, India (as GST), and many countries. Unlike sales tax, which is only applied at the final sale, VAT is collected at every step.
Divide the total price by (1 + tax rate). For example, if total price is $108 and tax is 8%, original price = $108 / 1.08 = $100.
Combined state and local sales tax rates can reach over 11% in some US jurisdictions. Tennessee and Louisiana have some of the highest combined rates. Oregon, Montana, and New Hampshire have no sales tax.
No. Many jurisdictions exempt essential goods like groceries, prescription medications, and clothing from sales tax. Services may also be taxed differently from physical goods, depending on the jurisdiction.