GST calculation: inclusive vs exclusive, explained

The arithmetic behind GST is short, but the direction matters — and getting it backwards is the single most common invoicing error.

Adding GST (exclusive price)

You have a net amount and need the total.

tax   = net × rate ÷ 100
gross = net + tax

At 18% on ₹1,000: tax is ₹180, gross is ₹1,180.

Removing GST (inclusive price)

You have a gross amount that already includes tax. This is where people mistakenly subtract 18% of the gross.

net = gross × 100 ÷ (100 + rate)
tax = gross − net

At 18% on ₹1,180: net is ₹1,000, tax is ₹180. Subtracting 18% of ₹1,180 would have given ₹967.60 — wrong by ₹32.40 on every line.

Splitting the tax

Intra-state supply splits the rate evenly: an 18% slab becomes 9% CGST plus 9% SGST, shown as two lines. Inter-state supply is one IGST line at the full 18%. The total is identical; only the presentation and the settlement between states differ.