GST & Tax
How to Calculate GST, A Simple Guide for Businesses
10 June 2026 · Piatto Pro Team
GST trips up more small businesses than almost any other part of billing, not because the maths is hard, but because the small details (inclusive vs exclusive prices, CGST/SGST splits, rounding) are easy to get subtly wrong. This is how it works.
The basic GST formula
To add GST to a price:
GST amount = (Original price × GST rate) ÷ 100 Final price = Original price + GST amount
A ₹1,000 item at 18% GST carries ₹180 of tax, so the customer pays ₹1,180.
To remove GST from a price that already includes it:
Original price = GST-inclusive price ÷ (1 + GST rate ÷ 100)
₹1,180 at 18% works back to ₹1,000 base + ₹180 tax. This matters when you quote a customer an all-in price and still need the correct taxable value on the invoice.
(Want the quick version? Use our free GST calculator.)
CGST and SGST, the split that confuses people
For a sale within the same state, GST is split into two halves:
- CGST (Central GST), half the rate
- SGST (State GST), the other half
So 18% GST on a ₹1,000 sale becomes ₹90 CGST + ₹90 SGST. For a sale across states, it’s a single IGST at the full rate (₹180). The total tax is identical, only the split and the ledger accounts differ.
Common GST rates
Most goods and services sit in the 5%, 12%, 18% or 28% slabs. Restaurants commonly bill at 5% GST (without input tax credit) under current rules, though your exact rate depends on your registration and category. When in doubt, confirm with your accountant, the wrong slab on thousands of invoices is an expensive mistake to unwind.
The mistakes that cost you
- Rounding per line vs per invoice. Round the total, not every line, or your invoice won’t reconcile to the paise.
- Forgetting HSN codes. Compliant invoices need the HSN code per item, leave it off and your GST return won’t match.
- Mixing inclusive and exclusive prices. Decide which your menu or catalogue uses, and keep it consistent.
Let the system do it
Doing this by hand at a busy counter is where errors creep in. A POS that prices tax inside the billing engine, HSN codes, CGST/SGST split, correct rounding, all automatic, means every invoice is right and your GST return is a report, not a reconstruction. That’s exactly how Piatto Pro handles GST and VAT.