Real Profit Calculation —
GST + ITC Included,
Step by Step
Your MRP is not your revenue. In this guide, we show you exactly how to strip out GST, claim your ITC on COGS and Amazon fees, and calculate your true per-unit profit — with real numbers and a free calculator.
You sell a product at ₹1,000 MRP — and assume ₹1,000 is your revenue?
That is the most common — and most costly — mistake Amazon sellers make.
A portion of that ₹1,000 belongs to the government as GST. And if you are not claiming your ITC, you are leaving thousands of rupees on the table every single month.
4 Things Every Amazon Seller Must Know About GST & Profit
Before we go through the formulas, here is the big picture. These are the four concepts this guide covers — each one directly impacts your per-unit profit calculation.
| Concept | What It Means | Formula / Rule | Impact on Profit |
|---|---|---|---|
| GST on Revenue Reduces Revenue | MRP includes GST — government's share must be separated first |
Revenue = MRP ÷ (1 + GST Rate)
₹1000 ÷ 1.12 = ₹892.86 |
₹107 less revenue per ₹1,000 MRP at 12% GST |
| ITC on COGS Reduces Cost | GST paid on purchase cost is recoverable from the government |
ITC = COGS − (COGS ÷ (1 + GST Rate))
₹400 − ₹357.14 = ₹42.86 ITC |
Effective COGS drops from ₹400 to ₹357.14 |
| ITC on Amazon Fees Reduces Cost | 18% GST on referral fee + FBA is claimable as ITC |
ITC = (Referral Fee + FBA) × 18/118
₹90 + ₹50 fees → ₹25.20 ITC |
₹25+ recovered per unit on fees alone |
| GST Slab Check Verify First | Slabs vary: 5%, 12%, 18%. Wrong slab = wrong calculation |
Check HSN code on GST portal
gstcouncil.gov.in → HSN Search |
Using 18% vs 12% = ₹53,500 error on 500 units |
Formulas + Worked Examples — Click to Expand
Each card contains the formula, a step-by-step worked example with real numbers, and a key takeaway. Click any card to expand it.
GST Amount = MRP − Revenue in Hand
Effective COGS = COGS − ITC on COGS
ITC on FBA = FBA Charge (incl.) × 18 ÷ 118
Total Fee ITC = ITC on Referral + ITC on FBA
− COGS (ex-GST, after ITC)
− Referral Fee (ex-GST, after ITC)
− FBA Charge (ex-GST, after ITC)
= Gross Profit per Unit (before ad spend)
Formulas + Worked Examples — Click to Expand
Each card contains the formula, a step-by-step worked example, and a key takeaway. Here is a free preview of the first formula:
At ₹1,000 MRP with 12% GST — your actual revenue is ₹892.86, not ₹1,000. The remaining ₹107.14 goes to the government as GST.
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What You Learned in Module 1
Always calculate revenue as MRP ÷ (1 + GST Rate). At 12% GST, ₹107 from every ₹1,000 belongs to the government — not you.
The GST embedded in your purchase cost is fully recoverable — reducing your effective COGS significantly. Requires a GST-registered supplier with a valid invoice.
Amazon charges 18% GST on Referral Fee and FBA. This is claimable every month via GSTR-3B. Most sellers miss this entirely.
Slabs range from 5% to 18%. Check your HSN code on the GST portal. Using the wrong rate makes every calculation wrong from the start.
Calculate Your Real Profit Right Now
Use the free SelluxPro Profit Calculator. Enter your MRP, COGS, referral fee and FBA charge — it handles all GST and ITC calculations automatically. Built specifically for Indian Amazon sellers.
Free to use · No account needed · Works instantly