40% GST on ₹10 lakh

₹10,00,000: GST exclusive vs inclusive

• Exclusive (adding GST): GST = ₹10,00,000 × 40 ÷ 100 = ₹4,00,000.
• Inclusive (removing GST): base = ₹10,00,000 × 100 ÷ 140 = ₹7,14,285.71; GST = ₹10,00,000 − ₹7,14,285.71 = ₹2,85,714.29.

CGST, SGST and IGST split

Within a state, the 40% is split equally into CGST and SGST (UTGST in union territories without a legislature) at 20% each. On a sale to another state, or an import, the full 40% is charged as IGST.

Shown to the paisa. On an invoice, tax is usually rounded to the nearest rupee or paisa as your billing software is set up.

What is taxed at 40%

40% is the special de-merit rate for a select few goods and services. It applies to mid-size and large cars, motorcycles above 350 cc, and sweetened or flavoured aerated drinks, which were at 28% plus compensation cess before 22 September 2025.

The rate for a particular item depends on its HSN code (goods) or SAC code (services), so confirm it in the CBIC rate notifications before you invoice.

Source: Recommendations of the 56th Meeting of the GST Council, Ministry of Finance press release, 3 September 2025 (PIB) (also on the GST Council website): a 5% merit rate, an 18% standard rate and a special 40% de-merit rate, with the rate changes on goods and services effective from 22 September 2025.

₹10,00,000 at every GST rate

40% GST on other amounts

• ₹1,000
• ₹10,000
• ₹1 lakh
• ₹10 lakh

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