One of the most common confusions while calculating Goods and Services Tax (GST) is understanding whether the price is GST inclusive or GST exclusive. This guide explains both concepts clearly with examples.
GST Exclusive means that GST is not included in the base price. The tax is added separately.
Example:
Base Price = ₹1,000
GST Rate = 18%
GST = ₹180
Final Price = ₹1,180
GST Inclusive means the GST is already included in the final price charged to the customer.
Example:
Final Price = ₹1,180
GST Rate = 18%
Base Price = ₹1,000
GST = ₹180
| GST Exclusive | GST Inclusive |
|---|---|
| GST added later | GST already included |
| Used in billing | Used in retail pricing |
| Clear tax separation | Convenient for customers |
Businesses usually prefer GST exclusive pricing for transparency, while retailers use GST inclusive pricing for simplicity.
To avoid confusion, use our GST Calculator to instantly calculate both inclusive and exclusive GST amounts.
Understanding GST inclusive and exclusive pricing helps avoid billing mistakes and ensures correct tax compliance.