Frequently asked questions
Goods and Service Tax (GST) is an indirect tax that everyone who makes, sells, or buys consumer goods or services is liable to pay. It is a tax that is based on where the value is going and has more than one step. The Indian Parliament passed the act on March 29, 2017, and it went into effect on July 1, 2017. GST has made it easier for businesses to pay taxes because it has replaced all indirect taxes like central excise duty, service tax, customs duty, VAT, Octroi, and surcharges.
The percentage of GST in India varies depending on the type of goods or service. There are four tax brackets, namely 5%, 12%, 18%, and 28%.
The online GST calculator lets you figure out either the gross or net price of a product based on the GST rate as a percentage. It saves time and makes it less likely that a person will make a mistake when figuring out the total cost of goods and services.
You can easily use the online GST calculator by doing the following:
- Enter the net price of a service or goods and the GST slabs, such as 5%, 12%, 18%, and 28%.
- Click on the "Calculate" button to see the final or gross price of goods and services.
GST calculation formula:
The calculator uses the below-mentioned formula to make it easy for businesses, manufacturers, wholesalers, and retailers to figure out GST:
Simple GST calculation
- Add GST:
GST amount = (Original cost x GST%)/100
Net price = original cost + GST amount - Remove GST:
GST amount = Original cost - [Original cost x {100/(100+GST%)}]
Net price = Original cost - GST amount
|
Rate (%) |
Original cost of goods |
|
GST |
18% |
Cost of goods sold |
|
GST calculation for manufacturers:
|
Rate (%) |
Pre- GST |
Cost of product |
|
10000 |
Excise duty |
12% |
1200 |
Profit |
10% |
1000 |
TOTAL |
|
12200 |
VAT |
12.50% |
1525 |
CGST |
6% |
Nil |
SGST |
6% |
Nil |
Final invoice to the wholesaler |
|
13725 |
At a cost of Rs.10,000, the manufacturer saves Rs.1405, which is equivalent to a 14% tax savings. This lowers costs for manufacturers, and the savings are eventually passed on to wholesalers, retailers, and consumers.
GST calculation for wholesalers and retailers:
|
Rate (%) |
Pre- GST |
Cost of product |
|
13725 |
Profit |
10% |
1373 |
TOTAL |
|
15098 |
VAT |
12.50% |
1887 |
CGST |
6% |
Nil |
SGST |
6% |
Nil |
Final invoice to the consumer |
|
16985 |
GST brings down the price of a product, so consumers pay less for goods even though wholesalers and retailers make the same amount of profit.
Calculating a reverse charge is not very different from figuring out GST. A reverse charge is when the person who buys the goods has to pay the GST instead of the person who sells them. In both situations, the tax is the same. For example, if you bought items worth Rs. 10,000. At 18%, the GST to be paid will be Rs. 1,800. If CGST and SGST are charged, each will cost Rs. 900. The only difference is that in a reverse charge, the tax amount, which in this case is Rs. 1,800, is due by the recipient.
A GST calculator is a tool used to determine the Goods and Services Tax (GST) amount payable on a transaction. By inputting the cost and applicable GST rate, the calculator computes the GST amount, aiding in accurate tax calculations for businesses and individuals.
Anyone, from small business owners to individuals, can utilise the GST calculator. It is a handy tool for accurately determining Goods and Services Tax liabilities, ensuring compliance and effective financial planning. Any buyer, manufacturer, wholesaler or retailer can use the calculator by following 2 simple steps:
- Type in the net price of your service or product and the GST tax slabs that apply, such as 5%, 12%, 18%, or 28%.
- Click "Calculate" to see the final or gross price of goods and services, and the tax owed.
Yes, it is mandatory for businesses registered under the GST to have a GST identification number (GSTIN) in India. The GSTIN is a unique 15-digit number assigned to every business that is registered under the Goods and Services Tax (GST) system.
GST returns encompass comprehensive information about your sales, purchases, taxes collected (output tax), and taxes paid (input tax). After filing GST returns, you settle the resulting tax liability owed to the government.
To calculate 18% GST on the total, you simply multiply the total amount by 18% (or 0.18). For example, if the total amount is Rs. 1000, the GST amount would be Rs. 180 (1000 x 0.18).
To calculate GST on your total sales, you need to first determine the GST rate applicable to your product or service. Once you know the applicable rate, you can multiply the value of your sales by the GST rate to calculate the GST amount.
To calculate GST on your bill, you need to first determine the GST rate applicable to the item(s) on your bill. Once you know the applicable rate, you can multiply the value of the item(s) by the GST rate to calculate the GST amount, and then add it to the total to get the final amount payable.
Input the net price before GST and specify the GST rate. The tool will then compute the total production cost, CGST, SGST, and overall tax amount.
Input the production cost or cost of goods, profit ratio percentage, and GST rate. The tool will then display the total production cost, along with CGST, SGST, and the overall tax amount.
