Question 1

How is GST calculated on Inclusive vs Exclusive prices?

Accepted Answer

For Exclusive prices: GST Amount = Base Price x (GST Rate / 100). For Inclusive prices: Base Price = Gross Amount x (100 / (100 + GST Rate)), and GST Amount = Gross Amount - Base Price.

Question 2

What is the difference between CGST, SGST, and IGST?

Accepted Answer

For an intra-state or intra-UT supply, GST is ordinarily split between Central GST (CGST) and SGST or UTGST, as applicable. An inter-state supply ordinarily attracts Integrated GST (IGST). Place-of-supply, registration-location and special statutory rules determine the treatment for the exact supply.

Question 3

What GST rates should I use in this calculator?

Accepted Answer

From 22 September 2025, the main rate structure is centred on 5% and 18%, with a special 40% rate for specified supplies and separate rates or exemptions for some goods and services. Classification, notification conditions and place-of-supply rules determine the actual rate, so confirm the current official rate for the specific supply before relying on the estimate.

Question 4

How does Input Tax Credit (ITC) prevent the cascading effect of tax?

Accepted Answer

A registered person may use eligible input tax credit against output tax subject to invoice, receipt, return-matching, payment and other statutory conditions. Blocked credits and restricted or ineligible purchases cannot be deducted merely because GST was charged, so the available credit can be lower than total input GST.

Question 5

What is the GST registration threshold for businesses in India?

Accepted Answer

Ordinary aggregate-turnover thresholds can differ for goods and services and by state/category, including ₹40 lakh or ₹20 lakh goods thresholds and ₹20 lakh or ₹10 lakh service thresholds in applicable cases. Compulsory-registration provisions, interstate/e-commerce rules, exemptions and notifications can override a headline threshold; check the taxpayer’s exact supplies and state.

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