Whether you’re checking a receipt, raising an invoice, or pricing a product, VAT and GST math comes up constantly — and the “remove the tax” direction trips up almost everyone. This guide shows you how to add VAT/GST, how to reverse it out of a gross price correctly, how the two compare to sales tax, and the rates used around the world. For instant numbers at any rate, use our free VAT & GST Calculator.

VAT vs GST vs Sales Tax: What’s the Difference?

All three are consumption taxes, but they work slightly differently. VAT (Value Added Tax) and GST (Goods and Services Tax) are essentially the same idea under different names — tax is collected at each stage of the supply chain, and registered businesses reclaim the tax they paid on inputs, so the final consumer effectively carries it. Traditional sales tax (common in the US) is charged once, at the final sale. For working out the tax on a single price, the math is identical — which is why one calculator handles all three.

How to Add VAT or GST to a Price

This is the straightforward direction:

Tax = Net × (Rate ÷ 100) and Gross = Net + Tax

So a product priced at $100 net with 20% VAT has $20 of tax and a gross price of $120. At 18% GST, the same $100 becomes $118. Easy enough — multiply and add.

How to Remove VAT or GST (Reverse VAT)

This is where the common mistake happens. If a price already includes 20% VAT, you can’t just subtract 20% to get the net — that gives the wrong answer. You have to divide it out:

Net = Gross ÷ (1 + Rate ÷ 100) and Tax = Gross − Net

For a $120 gross price at 20%: $120 ÷ 1.20 = $100 net, so the VAT is $20. Compare that to the wrong method: $120 − 20% = $96, which is off by $4. The bigger the rate, the bigger the error — which is exactly why a reverse VAT calculator is so handy for bookkeeping.

Worked example — reverse GST at 18%

A customer paid ₹1,180 including 18% GST. Net = 1,180 ÷ 1.18 = ₹1,000, so the GST inside the price is ₹180. The “subtract 18%” shortcut would wrongly give ₹967.60.

VAT and GST Rates Around the World

• United Kingdom: 20% VAT (standard), with reduced and zero rates for some goods.
• European Union: VAT roughly 17–27%, varying by country.
• UAE & Gulf: 5% VAT.
• India: GST at 5%, 12%, 18%, and 28% depending on the item.
• Australia: 10% GST.
• New Zealand: 15% GST.
• Canada: 5% GST, plus provincial taxes (HST in some provinces).

Reduced rates, zero-rated items, and exemptions are common, so always confirm the correct rate for your country and product.

What Are CGST, SGST and IGST? (India)

In India, GST on a sale within the same state is split into two equal halves: CGST (Central GST) and SGST (State GST). So 18% GST is recorded as 9% CGST + 9% SGST. For a sale between states, a single IGST applies at the full rate instead. The total tax is the same either way — it’s just how it’s allocated. Our calculator can show this split automatically.

VAT-Inclusive vs VAT-Exclusive Prices

A VAT-exclusive (or “net”) price doesn’t include tax yet — common in business-to-business quotes. A VAT-inclusive (or “gross”) price already has the tax baked in — what you see on most consumer price tags. Knowing which one you’re looking at tells you whether to add tax or reverse it out, and the calculator handles both directions.