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Complete GST guide for 2026: how to calculate GST, understanding 5%, 12%, 18%, 28% slabs, IGST vs CGST/SGST, input tax credit, HSN codes, and free GST calculator.
Everything you need to know
Goods and Services Tax (GST) replaced over a dozen central and state taxes in India since its launch in July 2017. Understanding GST isn't optional for business owners — filing incorrectly or missing input tax credits can cost your business lakhs of rupees.
This guide explains everything: the GST structure, tax slabs, how to calculate GST correctly, and how to claim Input Tax Credit (ITC).
Quick Calculation: Use our free GST Calculator to instantly calculate GST-inclusive or GST-exclusive prices with full IGST/CGST/SGST breakdown.
GST operates on a 4-tier tax structure:
| Slab | Rate | What's Included |
|---|---|---|
| Essential | 0% | Unprocessed food grains, fresh vegetables, milk, education, healthcare |
| Basic | 5% | Packaged foods, transportation, mobile services, small restaurants |
| Standard | 12% | Business class air travel, butter, cheese, processed foods, mobile phones |
| Standard Plus | 18% | Most services, electronics, computers, capital goods (most common) |
| Luxury/Sin | 28% | Cars, tobacco, aerated drinks, luxury goods, gambling |
Note: Some items carry additional cess on top of 28% GST — notably tobacco, aerated drinks, and large vehicles.
GST is split based on whether the transaction is within a state or across states:
CGST + SGST (Intra-state transactions):
IGST (Inter-state transactions):
Rule of thumb: If buyer and seller are in the same state → CGST + SGST. Different states → IGST.
GST Amount = Original Price × (GST Rate / 100)
Total Price = Original Price + GST Amount
Example: ₹10,000 product with 18% GST
Original Price = Total Price / (1 + GST Rate/100)
GST Amount = Total Price - Original Price
Example: You paid ₹11,800 for something with 18% GST — what was the base price?
ITC is the mechanism that prevents the cascading of taxes. If you're a GST-registered business, you can offset the GST you paid on purchases (input tax) against the GST you collect on sales (output tax).
ITC Example:
ITC Eligibility Rules:
ITC is NOT available on:
| Business Type | Registration Threshold |
|---|---|
| Goods supplier (most states) | Turnover > ₹40 lakhs/year |
| Service provider | Turnover > ₹20 lakhs/year |
| Special category states | ₹10 lakhs (goods) / ₹10 lakhs (services) |
| E-commerce operators | Mandatory regardless of turnover |
| Inter-state suppliers | Mandatory regardless of turnover |
Voluntary registration: Below-threshold businesses can register voluntarily to access ITC benefits — often beneficial if you have significant B2B transactions.
Every product has an HSN (Harmonized System of Nomenclature) code that determines its GST rate. For services, SAC (Service Accounting Code) serves the same purpose.
How to find your HSN code:
Getting the HSN code wrong leads to paying wrong rates and ITC complications. When in doubt, consult a tax professional or GST practitioner.
| Return | Who Files | Due Date |
|---|---|---|
| GSTR-1 | All regular taxpayers (outward supplies) | 11th of next month |
| GSTR-3B | All regular taxpayers (summary return + payment) | 20th of next month |
| GSTR-4 | Composition taxpayers | 30th April (annual) |
| GSTR-9 | Annual return (turnover > ₹2 crore) | 31st December |
Missing filing deadlines attracts late fees: ₹50/day (₹25 CGST + ₹25 SGST) for regular returns, or ₹200/day for annual returns, subject to a maximum cap.