GST & tax
GST inclusive vs exclusive pricing
5 min read
An exclusive price is your price before tax — GST is added on top at the invoice stage. An inclusive price is the single figure the customer pays, with the tax already sitting inside it.
Mixing the two up is one of the most expensive small errors in retail pricing, because it quietly eats the tax out of your margin.
The difference in numbers
| Exclusive quote | Inclusive quote | |
|---|---|---|
| What you tell the customer | ₹1,000 + GST | ₹1,180 all inclusive |
| Taxable value | ₹1,000 | ₹1,000 |
| GST | ₹180 | ₹180 |
| Customer pays | ₹1,180 | ₹1,180 |
| Typical audience | B2B, wholesale, services | Retail, MRP, counter sales |
Both formulas
Adding tax to an exclusive price:
Inclusive price = Taxable value × (1 + Rate ÷ 100)
Backing tax out of an inclusive price:
Taxable value = Inclusive price ÷ (1 + Rate ÷ 100)
GST = Inclusive price − Taxable value
Worked example. You want to sell at a clean ₹999 including 12% GST. Taxable value = 999 ÷ 1.12 = ₹891.96, so GST is ₹107.04. If your landed cost is ₹850, your real margin is on ₹891.96 — not on ₹999.
Pricing backwards from a round figure
Round retail price points are useful, but set them the other way round: decide the margin you need, compute the taxable value, then add GST and adjust the last rupees.
- Start from cost and target margin in the selling price calculator.
- Add GST to that taxable value with the GST calculator.
- If you round the inclusive price down to a price point, re-check the taxable value in the reverse GST calculator to confirm the margin survived.
What the invoice must show
Whichever way you quote, a tax invoice must show the taxable value and the tax separately — you cannot print only an inclusive total. See how to create a GST invoice for the full field list.