How do I add GST to a price?

Multiply the base price by (1 + rate/100). A $500 item at 18% GST becomes 500 × 1.18 = $590.

How do I remove GST from a tax-inclusive price?

Divide the tax-inclusive price by (1 + rate/100). A $590 price including 18% GST has a base of 590 ÷ 1.18 = $500, with $90 being the tax.

What is the difference between GST and sales tax?

Both tax consumption. GST/VAT is collected at each stage of the supply chain on the value added, while US-style sales tax is generally collected once at the final retail sale. The end consumer's burden is similar; compliance differs.

Why is my receipt's tax not exactly the rate × price?

Rounding rules, per-item taxation, exempt items mixed in the basket, and jurisdictional sub-rates (state + county + city) can all shift the final figure slightly from a simple rate multiplication.

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GST & Sales Tax Explained — Adding, Removing & Reverse Tax Math

Tax · 5 min read · Last updated September 2026

Adding tax to a base price

Tax = Base × Rate ÷ 100
Gross = Base × (1 + Rate ÷ 100)

$500 service at 18% GST → tax = 500 × 0.18 = $90 → gross = $590

Removing tax from a gross price (reverse GST)

Base = Gross ÷ (1 + Rate ÷ 100)
Tax = Gross − Base

This is the calculation businesses need for invoices quoted tax-inclusive, and shoppers need to see how much of a price is actually tax.

Receipt shows PKR 11,800 including 18% GST → base = 11,800 ÷ 1.18 = PKR 10,000, tax = PKR 1,800

Common GST/VAT/sales tax rates

Jurisdiction	Standard rate (indicative)
India (GST)	18% (slabs 0/5/12/18/28)
Pakistan (GST)	18%
UAE (VAT)	5%
UK (VAT)	20%
Australia (GST)	10%
Canada (GST/HST)	5% GST, 13–15% HST by province
US sales tax	0–10%+, varies by state and city

Rates change and reduced categories apply to specific goods — confirm with your tax authority for filings.

Common mistakes

Removing tax by subtracting rate% of the gross (11,800 − 18% = 9,676 ❌) instead of dividing (11,800 ÷ 1.18 = 10,000 ✓).
Applying one national rate to items that fall in reduced or exempt slabs.
Ignoring compounding sub-taxes in US state/county/city stacks.

How the GST chain works across the supply chain

Because registered businesses claim input tax credits, the government effectively collects tax only on the value each stage adds. At 18% GST: a manufacturer sells components for ₹12,000 and remits ₹2,160. A wholesaler buys those components, sells assembled goods for ₹15,000 — charging ₹2,700 in tax but crediting the ₹2,160 already paid, so the wholesaler remits only ₹540. A retailer sells to you for ₹18,000 — charging ₹3,240, crediting ₹2,700, remitting ₹540. Total collected: 2,160 + 540 + 540 = ₹3,240 = exactly 18% of the final ₹18,000 price — the same as taxing the final sale once. This is why GST is called a value-added tax in most of the world.

FAQ

Is GST calculated on discounted price?

Yes — tax applies to the actual transaction value after discounts, not the pre-discount tag.

Do businesses get GST back?

Registered businesses typically claim input tax credits on purchases used for taxable supplies, so they pay tax only on value added. Rules and documentation requirements vary by country.

What is inclusive vs exclusive pricing?

Inclusive = the sticker price already contains tax (common in VAT countries). Exclusive = tax is added at checkout (common in the US and on B2B invoices). The reverse formula above converts between them.