What is GST?
Goods and Services Tax is an indirect tax imposed on the supply of goods and services from 1st July 2017. GST acts as a single taxation system in India and replaces all the indirect taxes. Some of the abolished indirect taxes are VAT, Central Excise Duty, Octroi, and Entry Tax.
GST is a comprehensive tax which is a levy on the sale, manufacture, and consumption of goods and services. To get registered under the GST policy, every small and large organization is required to have a GST Identification Number.
Different types of GST collected by the government are:
a).State GST (SGST): State Government collects it
b). Central GST (CGST): Central Government collects it
c). Integrated GST (IGST): Central Government collects it for inter-state transactions and imports
d). Union Territory GST (UTGST): Union Territory Government collects it
1. What is GST Calculator?
GST Calculator is a device that helps in calculating the GST amount on different goods or services accurately. The tool's sole purpose is to show the total value of goods or services, including the amount of GST.
2. Why is GST Calculator important?
In India, there are five GST slabs, and if you are dealing in various GST Slab goods or services, you have to determine the values, including or excluding GST. In this scenario, an online GST Calculators comes handy as, through it, you can easily and quickly calculate GST on goods and services. In addition to this, if you want to create thousands of invoices for goods or services having different GST slab rate, then calculating values becomes a colossus task.
3. Information required to Calculate GST using an online GST Calculator?
To calculate GST using an online GST Calculator, the taxpayer must have the information regarding the GST rate or HSN/SAC Code applicable to those particular goods and services.
4. How is GST Calculated?
With the unified tax system, it is now possible for all the taxpayers to know the tax imposed at different points for various goods and services under the GST regimen. Every taxpayer should know the GST rate applicable to various categories that are required for GST calculation. There are five different slabs for GST 0%,5%, 12%, 18%, and 28%.
5. GST Calculation Formula
For calculating GST, a taxpayer can use the below-mentioned formula :
To add GST to the base amount,
GST Amount = ( Original Cost * GST% ) / 100
Net Price = Original Cost + GST Amount
To remove GST from the base amount,
GST Amount = Original Cost – (Original Cost * (100 / (100 + GST% ) ) )
Net Price = Original Cost – GST Amount
6. GST Calculation Example
A). If goods or services are sold at Rupees 2.000 with the GST rate applicable at 18%, then the net price(NP) is calculated as = 2,000+ (2,000(18/100)) = 2,000+180 = Rs. 2,180
B). In case a good is sold for Rs.2,000 and the GST rate applicable to it is 12%, then net price of the product will be Rs.2,000 + 12% of Rs.2,000 = Rs.2,000 + Rs.240 = Rs.2,240.
7. Tax Calculation under GST
Under the GST regime, every manufacturer and dealer can benefit from an input tax credit. Below is an example to show the difference in the amount of tax payable under the old tax system and the GST system:
8. Impact of GST on Product Pricing
The Central and State governments will levy indirect tax called Central GST (CGST) and State GST (SGST). The seller will collect SGST and CGST and from the buyer, in the case of intra-state transactions, which is paid to the Central and State governments. Below listed is an example of the impact of GST on product pricing:
9. Tax Calculation for Inter-State Sales
The Central Government will levy integrated GST (IGST) on inter-state supply of goods and services. IGST is transferred to the importing state in the case of inter-state transactions. In the old tax system, CST has been charged over and above VAT and the excise duty for the movement of goods between 2 countries. In the GST system, the products that are moving across state borders, IGST, are the only tax levied. Given Below is an example to understand the IGST system:
As per the above example, it is clear that under the GST system, manufacturers, wholesalers, and retailers will see a reduction in cost, whether inter-state or intra-state sales.
10. Benefits of GST Calculators
Below listed are some of the key benefits of using a GST calculator:
- It enables users to determine the net or gross product price on GST rates.
- It allows users to differentiate between SGST, CGST, and IGST and calculate each tax accurately.
- It saves time by providing instant results.
- It lowers the risk of human error when calculating the cost of products and services.
- It is simple to use and helps you calculate GST in a hassle-free manner.
11. GST Calculators
As you have already read about how GST calculation works now let us look at few online GST calculators available,
1. Bajaj Finserv:
Bajaj Finserv is an easy to use GST calculator, which helps you to make your online GST payments.
- First, to use the calculator, enter the net price of goods or services and its corresponding GST slab. GST slabs could be 5%, 12%, 18% and 28%.
- Then click the 'Calculate' button to determine the gross Price of the product or services along with CGST, IGST amount with Toal tax calculated.
ClearTax's is another online GST calculator that helps to calculate your GST to make your GST payment online. Enter these below details for tax calculation:
- The net value of the goods and services.
- The associated GST rate for goods and services. GST slabs could be 12% 5%, 18%, 28%.
Once you click the calculate button, the ClearTax GST calculator will display the tax amount for CGST, SGST, and IGST and the gross price of the goods or services.
How GST is Calculated using Deskera Books?
Deskera Books simplifies the implemented GST taxation and allows you to conduct business on a pan-India basis with an online accounting system.
Deskera Books can easily calculate the applicable GST based on the government's 'Place of Supply' rule by which GST becomes a destination-based tax and is levied at the point of delivery. Calculate state GST, central GST, and Integrated GST within one Book system and generate smart reports for tracking applicable rates in a single view.
It ensures a complete transformation to GST to ease GST filing and invoice generation without hassle.
The GST calculator takes in an amount (gross or net), rate of GST tax, and an option to tell the calculator whether to Add or Remove the Goods and Services Tax from the given amount. This new form of tax is expected to be levied by India's Government from April 2016. GST classification is made into Central GST (CGST), State GST (SGST), and Integrated GST (IGST).
You can calculate GST using Deskera Books easily and generate the Reports for filing purpose. Sign up for a free trial today and see GST calculation in action.