GST After 22 September 2025: New Slabs and How to Calculate GST on a Bill

What changed in the GST slabs

The 56th GST Council meeting, held on 3 September 2025, recommended moving from four slabs to a simpler structure. The new rates took effect from 22 September 2025 for most goods and services:

• 5%, the lower rate for many essential and commonly used items.
• 18%, the standard rate for most goods and services.
• 40%, a special rate for a limited set of luxury and sin goods.
• 0% for exempt or nil-rated items.
• Some special rates continue, such as 3% on gold and silver.

Individual items moved between slabs in different ways, and detailed lists are published by the GST Council and the tax department. Because the rate depends on the product or service, never assume a rate from a category name alone. Check the official notification or ask your accountant.

How to add GST to a price

When your price is before tax, multiply it by the GST rate and add the result:

GST amount = price × rate ÷ 100
Total = price + GST amount

Example: ₹1,000 at 18% has GST of ₹180, so the total is ₹1,180. At 5%, ₹2,000 has GST of ₹100, so the total is ₹2,100. At 40%, ₹10,000 has GST of ₹4,000, so the total is ₹14,000.

How to remove GST from a total

When a price already includes GST (for example, an MRP), divide it by 1 plus the rate as a decimal:

Price before GST = inclusive price ÷ (1 + rate ÷ 100)

Example: a total of ₹1,180 at 18% gives ₹1,180 ÷ 1.18 = ₹1,000. The GST inside the total is ₹180. A common mistake is to subtract 18% of ₹1,180, which gives ₹212.40 and the wrong base amount. Always divide, do not subtract.

CGST, SGST and IGST: which one appears on the invoice?

GST has three components. For a sale within one state, the tax is split equally between Central GST (CGST) and State GST (SGST). For a sale between states, the full amount is charged as Integrated GST (IGST). The total tax is the same either way.

Example: an 18% GST of ₹180 on a ₹1,000 sale becomes ₹90 CGST + ₹90 SGST within a state, or ₹180 IGST between states. Whether a sale is within a state or between states depends on the supplier’s location and the place of supply, so confirm which case applies to your sale.

Discounts and GST

When a discount is given on the invoice, GST is generally charged on the value after the discount. For example, a ₹10,000 item with a ₹1,000 discount has a taxable value of ₹9,000, so 18% GST is ₹1,620 and the total is ₹10,620. How a discount interacts with GST can depend on how and when it is given, so check with your accountant for special cases such as post-sale discounts.

What to check on a GST invoice

• The correct rate for the date of supply. Supplies made before 22 September 2025 may have been taxed at the older rates, so be careful with bills that span the change.
• The HSN or SAC code and description of each item.
• The GSTIN of the seller and, where required, the buyer.
• The tax split: CGST and SGST, or IGST.
• The invoice number, date, taxable value, tax amount and total, and the amount in words.

Depending on the type of supply, an invoice may need further details, such as place of supply or reverse charge. Confirm what applies to your business with your accountant.

Quick ways to check your numbers

Use the GST Calculator to add or remove GST at any rate and see the CGST and SGST split. To prepare a printable A4 bill with HSN, CGST/SGST or IGST and the amount in words, use the Invoice Generator. These tools do the arithmetic but do not decide the rate for you. Check the current rate for your item from official sources.

Frequently asked questions