Guides / GST Explained for Beginners: Rates, Calculation and Credit

GST Explained for Beginners: Rates, Calculation and Credit

GST (Goods and Services Tax) is a single indirect tax on most goods and services in India.

Current rate slabs

After the 2025 reform, the main rates are 5% and 18%, with 40% on a small list of luxury and sin goods. A few items have special rates such as 0.25% and 3%, and some are exempt. Rates change, so check the official list for your product.

How to calculate

• Add GST: price × (1 + rate). For ₹10,000 at 18%, GST is ₹1,800 and the total is ₹11,800.
• Remove GST: price ÷ (1 + rate). For ₹11,800 at 18%, the base price is ₹10,000.

Use the GST Calculator for either.

The three types

Input tax credit

Businesses can reduce the GST they owe by the GST they paid on purchases. This avoids tax being charged on tax.

Do you need to register?

Small businesses below a turnover limit may not need to register, though thresholds differ for goods, services and some states. Check the latest limits on the GST portal.