What is reverse GST calculation?
Reverse GST (also called back-calculation or GST-inclusive calculation) starts from a price that already contains GST — like an MRP, a restaurant bill or a quoted “all-inclusive” fee — and works backwards to find the base price and the tax hidden inside it.
Base price = Inclusive amount × 100 ÷ (100 + GST rate)
GST amount = Inclusive amount − Base price
GST amount = Inclusive amount − Base price
Example: a product with MRP ₹1,180 at 18% GST has a base price of ₹1,000 and contains ₹180 GST (₹90 CGST + ₹90 SGST). At 5%, an inclusive ₹1,050 breaks into ₹1,000 + ₹50.
When you need it
- Sellers pricing products by MRP who must report the taxable value in returns
- Buyers claiming ITC from inclusive bills
- Freelancers quoting all-inclusive fees who need the base for their invoice