What is GST?
Goods and Services Tax
(GST) is an indirect tax imposed in India which is levied on the
supply of goods and services. GST is a comprehensive, multi-stage,
destination based tax levied on every value addition. GST came into
effect on 1st July 2017 and replaced most indirect taxes in the
country. Under GST goods and services are divided into five distinct
tax rates- 0%, 5%, 12%, 18% and 28%. However, some products such as
petroleum products, alcoholic drinks, and electricity are not taxed
under GST. These products are taxed separately by the individual state
governments, as per the previous tax regime.
What are different tax heads under GST?
GST can be categorised under four heads such as Central Goods and
Services Tax (CGST), State Goods and Services Tax (SGST), Union
Territory Goods and Services Tax (UTGST) and Integrated Goods and
Services Tax (IGST).
IGST is charged for interstate supplies
where the place of supply is in different State compared to the
location of the supplier. Equal rate of CGST and SGST(approximately
half the GST rate applicable for IGST) is charged for intrastate
supplies where the place of supply is in the same State compared to
the location of the supplier.
What is GST calculator?
GST calculator is a handy ready-to-use online calculator to compute
the GST payable for a month or quarter. This calculator can be used by
different types of users, such as buyers, manufacturers, and
wholesalers.
Advantages of GST Calculator
The simplified GST calculator helps you determine the gross or net
product price on percentage-based GST rates. It helps give the
bifurcation of the rate between CGST and SGST or calculate IGST
accurately. The GST calculator saves time and reduces the chances of
human error while computing the total cost of goods and services.
How to calculate GST using our ClearTax GST calculator?
You can easily use the GST calculator by following the simple steps:
Step-1: Enter the following details:
- Net price of a service or good and
- GST rate that applies such as 5%, 12%, 18% and 28%.
Step-2:Click on ‘calculate’ button. ClearTax GST calculator will
display the tax amounts for each tax head CGST and SGST or IGST along
with the final/ gross price of the goods and service to be billed.
Formulae for GST Calculation:
Any business, manufacturer, wholesaler and retailer can calculate GST
easily with the help of the following formula:
-
Where GST is excluded:
GST Amount = (Value of supply x
GST%)/100
Price to be charged = Value of supply + GST Amount
-
Where GST is included in the value of supply:
GST Amount =
Value of supply – [Value of supply x {100/(100+GST%)}]
Examples for understanding GST calculation
Given below is a simple illustration for GST calculation:
| Particulars |
Rate(%) |
Amount |
| Invoice value |
12% |
100,000 |
| GST |
12,000 |
| Price to be charged on the Invoice |
112,000 |
Calculation of GST by Manufacturers:
| Particulars |
Rate(%) |
Amount Pre-GST |
Amount under GST |
| Cost of the product |
– |
200,000 |
200,000 |
| Profit |
10.00% |
20,000 |
20,000 |
| Excise Duty |
12.50% |
27,500 |
Nil |
| Total |
– |
247,500 |
220,000 |
| VAT |
12.50% |
30,938 |
Nil |
| CGST |
6% |
Nil |
13,200 |
| SGST |
6% |
Nil |
13,200 |
| Final Invoice to the wholesaler |
– |
278,438 |
246,400 |
The manufacturer saves Rs.160 on a cost of 1000 points i.e. 16%
savings on the cost due to change in tax.
There is a cost reduction for manufacturers, who pass this benefit
along the supply chain to the wholesalers, retailers and
end-consumers.
Calculation of GST by Wholesalers & Retailers:
| Particulars |
Rate(%) |
Amount Pre-GST |
Amount under GST |
| Cost of the product |
– |
278,438 |
246,400 |
| Profit |
10% |
27,844 |
24,640 |
| Total |
– |
306,282 |
271,040 |
|
VAT (Rs. 306282 x 12.5%) – (Credit on VAT paid above Rs. 30,938)
|
12.50% |
7,347 |
Nil |
|
CGST (Rs. 271040 x 6%) – (Credit on CGST paid above Rs.13,200)
|
6% |
Nil |
3,062 |
|
SGST (Rs. 271040 x 6%) – (Credit on SGST paid above Rs.13,200)
|
6% |
Nil |
3,062 |
| Final Invoice to the end-consumer |
– |
313,629 |
277,164 |
The cost of the product falls due under the GST regime and the
end-consumer has to pay a lesser price for the goods at the same
profit margin earned by wholesalers and retailers.
For a detailed calculation of your net GST liability payable in cash,
check out our
GST input credit utilisation and tax calculation calculator . The tool works offline for you and automatically calculates the net
liability in cash after considering the balances in electronic credit
ledger for each tax head-IGST, CGST and SGST/UTGST.
FAQs
-
What is the GST calculator?
GST calculator is used to calculating the GST payable for a
specific period.
-
Who can use the GST calculator?
The GST calculator can be used by a buyer, manufacturer, and
wholesaler as well.
-
How can a buyer use the GST calculator?
Enter the net price before GST and then enter the rate of GST.
It will calculate the total cost of production, CGST, SGST,
and total tax.
-
How can a manufacturer/wholesaler use the GST calculator?
Enter the cost of production/cost of goods, profit ratio
percentage, and rate of GST. It will show the total cost of
production, CGST, SGST, and total tax.
-
What are the benefits of the GST calculator?
The GST calculator saves time and reduces the chances of human
error while computing the total cost of goods and services and
the tax amount.
