What is GST in India? Rates, bills and input tax explained

What is GST?

GST means Goods and Services Tax. It is India’s indirect-tax system for most goods and services. It replaced several earlier central and state taxes, though some items are treated differently.

Why do GST rates differ?

GST is not one flat rate for every purchase. A product or service is classified using the applicable tax rules, and the rate depends on that classification. Since 22 September 2025 most goods and services are taxed at the 5% merit rate or the 18% standard rate, and a special 40% rate applies to a select few goods and services. The earlier 12% and 28% slabs were retired for most items. Some items are nil-rated or exempt, and a few goods are treated differently, so check the correct rate for a particular item from the official rate schedule or your invoice.

These rates come from the GST Council's 56th meeting (3 September 2025). The 57th meeting (8 October 2026) made process reforms and item-level rate clarifications but did not change this structure.

CGST, SGST and IGST

For many transactions within one state, GST can appear as CGST and SGST on the invoice. For many inter-state supplies, IGST applies instead.

Consumers usually only need to check that the invoice clearly shows the taxable value, applicable rate and tax amount. Businesses have additional filing and input-credit requirements.

On a jewellery bill, for example, GST is charged on the gold value and on the making charges. The Gold Jewellery Calculator shows each part separately from a gold rate you enter; it does not provide a live rate.

Inclusive and exclusive prices

An inclusive price already includes GST. An exclusive price shows the base price first and adds GST separately.

For example, if a seller quotes a service price as “₹1,000 + GST”, the final amount will be higher than ₹1,000. If the quote says “₹1,000 inclusive of GST”, the tax is already inside the stated amount.

What is input tax credit?

Input tax credit, usually called ITC, is a mechanism that can allow an eligible registered business to claim credit for GST paid on qualifying business purchases against GST it must pay on its taxable supplies.

ITC is a business tax-compliance concept, not a discount that a normal retail customer claims on a personal purchase. Eligibility depends on the GST law, invoice and compliance conditions.

What should a GST bill show?

For a business invoice, look for the seller’s name, GSTIN where applicable, invoice number and date, taxable value, GST rate and tax amount. A buyer should not rely on a verbal tax claim when a proper bill is available.

If you are unsure whether a GSTIN or rate is valid, check the official GST portal or CBIC guidance instead of relying on an edited invoice screenshot.