GST in India — A Quick Overview
GST (Goods and Services Tax) replaced multiple indirect taxes in India on 1 July 2017. It is a destination-based tax levied on the supply of goods and services. GST has four main rate slabs: 5%, 12%, 18% and 28%, with some goods at 0% (exempt). GST comprises CGST (Central) and SGST (State) for intra-state, and IGST for inter-state transactions.
Tax-Exclusive vs Tax-Inclusive Calculation
Final Price = Base Price + Tax Amount
Example: ₹10,000 + 18% GST → Tax = ₹1,800 → Total = ₹11,800
Base Price = Total Price − Tax Amount
Example: Extract 18% from ₹11,800 → Tax = ₹1,800 → Base = ₹10,000
Common GST Rate Examples
| Item / Service | GST Rate |
|---|---|
| Essential food items (rice, wheat, milk) | 0% (Exempt) |
| Packaged foods, hair oil, coal | 5% |
| Mobile phones, computers, medicine | 12% |
| Restaurant food, financial services, AC hotels | 18% |
| Luxury cars, tobacco, aerated drinks | 28% |
Frequently Asked Questions
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