GST arithmetic looks trivial until you have to take tax out of a price. Adding 18% is a multiplication; removing it is not a subtraction, and getting that wrong understates your margin on every product you sell. Here is how both directions work, with the numbers.
Adding GST to a price (exclusive)
When your price does not yet include tax, multiply it by the rate:
- GST = price × rate ÷ 100
- Price including GST = price + GST
At 18%, a ₹1,000 product carries ₹180 of GST, so the price including GST is ₹1,180.
Removing GST from a price (inclusive)
Marketplace prices are GST-inclusive, so this is the calculation most sellers actually need. Divide, don't subtract:
- Taxable value = inclusive price × 100 ÷ (100 + rate)
- GST = inclusive price − taxable value
For ₹1,180 at 18%: 1,180 × 100 ÷ 118 = ₹1,000 taxable value and ₹180 GST.
The mistake almost everyone makes
Taking 18% off ₹1,180 gives ₹212.40 of "tax" and a taxable value of ₹967.60. That is wrong by ₹32.40, because the 18% was charged on ₹1,000, not on ₹1,180. The percentage always applies to the taxable value, which is why removing tax needs division.
| Method | Taxable value | GST |
|---|---|---|
| Correct: ₹1,180 × 100 ÷ 118 | ₹1,000.00 | ₹180.00 |
| Wrong: ₹1,180 − 18% | ₹967.60 | ₹212.40 |
On a low-margin product, ₹32 is the difference between a profitable listing and a losing one.
CGST and SGST, or IGST?
The total tax is the same either way; what changes is how it is split:
- Same state (intra-state supply): half CGST, half SGST. ₹180 at 18% becomes ₹90 CGST + ₹90 SGST, each at 9%.
- Different states (inter-state supply): all IGST. ₹180 at 18% is ₹180 IGST.
The place of supply decides it. For goods shipped to a buyer, that is generally where the goods are delivered — so an order shipped from Gujarat to a buyer in Delhi is inter-state and carries IGST.
A worked example at 5%
A kurti listed at ₹599, taxed at 5%:
- Taxable value: 599 × 100 ÷ 105 = ₹570.48
- GST: 599 − 570.48 = ₹28.52
- Same state: ₹14.26 CGST + ₹14.26 SGST. Different state: ₹28.52 IGST.
The ₹570.48 is the figure your product cost, packaging, marketplace fees and shipping have to fit inside — not ₹599.
Rounding
Work in paise and round each tax amount to two decimals. When splitting into CGST and SGST, round one half and give the other the remainder, so the two always add back to the total tax exactly.
Try it: Use the free GST calculator — free, no signup, runs in your browser.
Not sure which rate applies? The GST slabs after GST 2.0 explains the current rates, and the profit calculator takes it from tax to margin.
Sources
Checked on 1 October 2026. Tax rules change; confirm against current notifications or with your tax adviser before relying on them.