GST Inclusive Price: How to Work Out Tax on an Invoice

A GST inclusive price already contains the tax. To find the taxable value, divide by (100 + GST rate) and multiply by 100: at 18%, ₹1,180 is a taxable value of ₹1,000 plus ₹180 GST. Within one state that ₹180 is split into ₹90 CGST and ₹90 SGST; between two states it is charged as ₹180 IGST. That is the whole idea. The rest of this guide shows how to apply it correctly on a B2B tax invoice.

In the kirana and FMCG trade, rates are often quoted inclusive of GST: "₹1,180 per carton, all included". That is convenient for buying, but the tax invoice has to show the tax separately. If the split is wrong, the retailer's input tax credit and the wholesaler's returns can both go wrong.

This is general guidance to help you read and check invoices. For anything specific to your business, talk to your chartered accountant.

GST inclusive price vs exclusive price

	Exclusive price	Inclusive price
What the number means	Price before GST	Price after GST
How it is written	"₹1,000 + GST"	"₹1,180 incl. GST"
To get the total	Add GST	Already the total
To get the taxable value	Already the taxable value	Back-calculate

MRP printed on packaged goods is always inclusive of all taxes. Wholesale rates can be either, so always confirm which one you have been quoted.

How to calculate tax from a GST inclusive price

The formulas

• Taxable value = inclusive price × 100 / (100 + rate)
• GST amount = inclusive price × rate / (100 + rate), which is the same as inclusive price − taxable value

Worked examples

At 18%: inclusive price ₹590. Taxable value = 590 × 100 / 118 = ₹500. GST = ₹90.

At 5%: inclusive price ₹1,050. Taxable value = 1,050 × 100 / 105 = ₹1,000. GST = ₹50.

A common mistake: taking 18% of the inclusive price. 18% of ₹590 is ₹106.20, which is wrong, because the ₹590 already includes the tax. Always divide by (100 + rate), never multiply the inclusive price by the rate.

Rounding

Amounts rarely come out round. Calculate each line to the paisa, then total the lines. Many invoices show a small "round off" line to bring the payable amount to whole rupees. Keep the method the same on every invoice.

CGST + SGST or IGST?

GST on goods is split based on where the supply takes place compared with where the supplier is registered.

• Intra-state supply (supplier and place of supply in the same state): the tax is split equally. At 18%, that is 9% CGST + 9% SGST (or UTGST in a union territory without a legislature).
• Inter-state supply (different states): the full rate is charged as IGST. At 18%, that is 18% IGST.

The first two digits of a GSTIN are the state code. Comparing the seller's and buyer's state codes is a quick way to spot whether a B2B supply is normally intra-state or inter-state. Example on ₹590 inclusive at 18%:

	Intra-state	Inter-state
Taxable value	₹500.00	₹500.00
CGST 9%	₹45.00	–
SGST 9%	₹45.00	–
IGST 18%	–	₹90.00
Total	₹590.00	₹590.00

The buyer pays the same total either way; only the tax head changes. Place of supply has special rules in some situations, so check unusual cases with your CA.

What a B2B GST tax invoice should show

A tax invoice from a registered supplier generally needs:

1. Supplier's name, address and GSTIN.
2. A unique invoice number, in a consecutive series for the financial year.
3. Invoice date.
4. Buyer's name, address and GSTIN (for registered buyers).
5. Description of goods with the HSN code.
6. Quantity and unit.
7. Rate and the taxable value per line, after any discount.
8. GST rate and tax amount, shown as CGST + SGST or IGST.
9. Place of supply (with state) for inter-state supplies.
10. Total invoice value, often also in words.

How many HSN digits you must show depends on your turnover; at the time of writing, businesses with aggregate turnover up to ₹5 crore generally show 4 digits on B2B invoices and larger ones show 6. GST rates on many items were also revised in 2025, so check the current rate for each HSN before you set up your catalogue.

Checklist before you send an invoice

• Is the price inclusive or exclusive, and is the calculation using the right formula?
• Does each item have the correct HSN code and GST rate?
• Do the GSTINs and state codes decide CGST+SGST or IGST correctly?
• Does the invoice show only what was actually delivered?
• Is the invoice number the next one in this financial year's series?

How MaalMitra helps

MaalMitra creates the GST tax invoice for wholesalers as part of the order flow, so nobody has to type a bill after delivery.

• Invoice on delivery. A GST tax invoice is created when an order is delivered, numbered per wholesaler per financial year.
• Delivered quantities only. If an order was partly fulfilled or short-delivered, the invoice covers only what reached the retailer, and the same amount goes to the khata.
• Inclusive prices, separated correctly. Item prices are treated as GST-inclusive; the invoice shows the rate before GST, the taxable value, the GST rate and the tax for each line, plus a rate-wise summary.
• HSN on every line. HSN can be set per product, including through CSV bulk upload.
• CGST + SGST or IGST by GSTIN state. The invoice compares the state codes in the seller's and buyer's GSTINs. When the buyer has no GSTIN, the supply is treated as within the seller's state.
• Round off and amount in words, with print and PDF.

Because the invoice is created from the delivery record, it pairs naturally with a proof of delivery app. If you are a wholesaler moving your ordering online, our guide to a B2B ordering app for wholesalers covers the rest of the flow.

The bottom line

The GST inclusive price is easy to work with once you remember one rule: divide by (100 + rate), don't multiply. Get the HSN and rate right on each product, let the GSTIN state codes decide the tax heads, and invoice only what you delivered. For anything unusual, a quick call with your CA is worth it.

Want invoices that build themselves from every delivery? Get started free with MaalMitra.