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GST Calculator

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GST is levied on the manufactures, consumers and sellers of the consumer goods and services. The Government of India introduced the GST system and it is based on the principle of Value Added Tax. A consumer has to pay GST to the last supplier of the supplier chain. It is more convenient than the previous form of indirect taxation used by the Government.

Goods and Services Tax(GST) is the most significant reform in the history of indirect taxation in the country. Earlier a plethora of taxes were charges throughout the states in the entire country. GST is an improvement over the previous tax system since it centralizes the taxation system to a large extent. It is now easy for the common man to understand the percentage of indirect taxes that they are charged on any service. GST as a taxation system is aligned with the government's idea of a common national market.

GST calculator is available online on many third-party websites. This calculator is used to calculate the amount of Goods and Services Tax that is levied on different items. The GST online calculator is easy to operate and comes handy in analyzing product pricing and tax compliance.

Formula used to calculate GST

To calculate the GST on a particular good or service, all you need to do is put the net amount of item along with the tax rate applicable to it. Click on 'Calculate,' and the gross value of the item will be shown on the screen. The table below shows how GST is calculated on an item:

If the value of an item is fixed at Rs.200 and the GST rate on the item is 18%, the gross value of the item would be 200+ [200x(18/100)]=Rs.216

How to calculate GST

Adding GST

GST = (Original cost x Tax%)/100

Net price = Original Cost + GST

Removing GST

GST = Original Cost - [Original Cost x {100/(100+GST%)}]

Net Price = Original Cost - GST

GST Impact on Pricing the Product

Indirect Taxes levied by the Central and State Government is known as CGST and SGST respectively. In the case of inter-state transactions, the seller collects CGST and SGST separately from the consumer and it is paid to the Central and State government. The table below shows the impact of GST on Product Pricing:

GST Bill Rates

GST Bill is considered as a milestone with respect to taxation in the country. The main motive of the bill was to avoid the rampant 'double-taxation.' The GST Bill was approved on 29th March 2017 and the deadline for complete implementation was 1st July. With the implementation of the GST Bill, some goods will become cheaper while others will become dearer depending on the tax slab the goods or services fall in. The GST Bill introduced five tax slabs, namely, 0%,5%,12%,18%,25%. The rationale behind implementing multiple tax slabs was that necessary goods and services must not be charged with the same tax as luxury goods.

The GST Bill had two components; first is the taxes levied by the Centre is known as CGST and the other component being the taxes levied on the state, known as SGST. Only goods and services that are exempted from GST are the necessary goods which are mostly consumed by the low-earning families. Both Centre and State have the jurisdiction to prescribe the tax rate for commodities and services since the implementation of GST widely depends on the receptiveness from the public.

Tax Calculation: Old Tax System vs. GST System

Manufacturers and traders benefit from GST majorly. Below described is an example to show the tax calculation under the previous tax system and GST system.

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Due to the abolition of excise duty, VAT, service tax, etc.., there is a reduction in cost for the manufacturers, traders and other retailers

Inter-State sales Tax Calculation

Integrated GST is levied on the inter-state supply of goods by the Government. IGST is charged from the importing state in case of inter-state transfer. In the earlier system, CST was charged above VAT for inter-state transfer of goods. Under the new tax system, only the Integrated GST is charged on the goods and services transacted between two states.

Example to understand the IGST system:

Under the GST system, there is a reduction in cost in inter-state and intra-state sales.

Benefits of GST Calculator

It is essential for people to accept and understand the new taxation system for the proper implementation of GST. GST Calculator can help people calculate the GST chargeable on the goods and services that they purchase easily at their convenience. Estimating the amount of GST manually might result in human error creeping into the entire calculation.

Benefits of GST implementation in India

  1. Sets a global standard in indirect taxation.
  2. Ensures transparency in the tax structure
  3. GST system prevents double taxation, which was a major problem in the old tax system.
  4. Due to the transparency that the system provides, GST can increase competition in the market which would result in an improvement in the quality of goods.
  5. Reduction in taxes would reduce the cost of production for the manufacturers.
  6. Implementation of GST can reduce inflation
  7. GST will bring about a decrease in tax liability
  8. The input tax credit also increases with the implementation of GST 

Changes

  1. The taxation on capital goods has changed since the introduction of GST. Earlier, the excise was applicable on capital goods but after GST was introduced all the capital goods are taxed under the GST Bill.
  2. Wholesalers, retailers and manufacturers will face a reduction in costs.
  3. There will be a fall in input tax credit after the implementation of GST
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GST Returns for Business

To understand the filing of GST Returns, we first need to understand the sub-parts of GST

Subparts of GST

SGST

SGST is the State Goods and Services Tax is applicable on sales within the state and the tax collected in the form of SGST is directed towards the state government.

IGST

IGST is Integrated Goods and Services Tax and it is applicable on the inter-state or intra-state transactions and it is channeled to the Central Government.

CGST

CGST is the Central Goods and Services Tax and is applicable for the movement of goods and services inside the state and the tax collected through CGST is directed towards the Central Government.

How to file GST Returns

Companies and businesses are required to file their GST returns on the Goods and Services Tax Network portal. The GSTN portal is hassle-free and it uses powerful Information technology to provide a convenient and efficient portal for filing tax returns for the business owners and manufacturers. Every business is given a GST Identification Number which they can use to file your GST returns, they are supposed to file Income Tax returns on a monthly or quarterly basis.

How businesses in India operate under GST regime

If the yearly turnover of business is over 2 million rupees, they are required to register their trade under the GST regime, for northeastern states, the limit is 1 million Rupees.

Types of GST Return Forms

GSTR 1

GSTR 1 is used by traders to provide information regarding supplies. If your business is registered under GST, you're required to fill up this form invariably.

GSTR 1A

GSTR 1A is the subsidiary form of GSTR 1, so, if the purchaser makes changes in Form GSTR 1, the changes are reflected in GSTR 1A. After the details are verified from GSTR 1A, GSTR 1 is filed.

GSTR 2

GSTR 1 is validated through GSTR 2 form. The GSTR 2 form is received as GSTR 2A form and post verification the tax is filed in form GSTR 2

GSTR 3

The total tax liability of business is reflected in GSTR 3. It is an amalgamation of GSTR 1 and GSTR 2 forms.

GSTR 9

This form reflects all the returns that you have filed for the entire year. The returns filed towards SGST, CGST and IGST are mentioned in this form.

GSTR 10

You can make use of the GSTR form if the returns that you filed have been canceled for some reason. You'll be required to file returns on this form within three months.

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