How to calculate GST correctly — CGST, SGST and IGST explained
GST has three components — CGST, SGST and IGST — and which one you charge depends entirely on whether the transaction is within the same state or across states. Most people get confused here. This guide explains it simply.
The one rule that matters: same state vs different state
Intra-state transaction (buyer and seller in same state): You charge CGST + SGST. Each is half the total GST rate.
Inter-state transaction (buyer and seller in different states): You charge IGST only. IGST = full GST rate.
Example: 18% GST on a ₹10,000 service
| Scenario | CGST | SGST | IGST | Total tax |
|---|---|---|---|---|
| Same state (e.g. Mumbai → Pune) | ₹900 (9%) | ₹900 (9%) | — | ₹1,800 |
| Different state (Mumbai → Delhi) | — | — | ₹1,800 (18%) | ₹1,800 |
Total tax is the same either way. Only how it's split and who gets it (state vs centre) changes.
GST slabs and what falls in each
| Rate | Common items/services |
|---|---|
| 0% | Fresh vegetables, milk, eggs, bread, books, newspapers |
| 5% | Packaged food, rail tickets (non-AC), domestic LPG, medicines |
| 12% | Processed food, mobile phones, business class air travel |
| 18% | Most services (IT, consulting, banking), restaurants, electronics |
| 28% | Luxury goods, cars, cigarettes, aerated drinks |
How to calculate GST on any amount
Adding GST to a net amount:
GST amount = Net amount × (GST rate / 100)
Gross amount = Net amount + GST amount
Example: ₹50,000 net, 18% GST → GST = ₹9,000 → Gross = ₹59,000
Removing GST from a gross amount (reverse calculation):
Net amount = Gross ÷ (1 + GST rate/100)
GST amount = Gross − Net
Example: ₹59,000 inclusive, 18% → Net = ₹59,000 ÷ 1.18 = ₹50,000 → GST = ₹9,000
Calculate GST instantly →When do freelancers need to register for GST?
You must register for GST if your annual turnover exceeds ₹20 lakh (₹10 lakh for special category states like Manipur, Sikkim). If you provide services only within India and earn below this threshold, you don't need to register or charge GST.