What is GST?
The Goods and Services Tax (GST) is an indirect tax imposed on the supply of goods and services in India. GST is a comprehensive, multi-stage tax imposed on any value addition, based on destination. On 1 July 2017, GST came into force and replaced much of the country’s indirect taxes. Goods and services under GST are divided into five different tax rates: 0%, 5%, 12%, 18% and 28%. However, certain goods are not taxed under GST, such as petroleum products, alcoholic beverages, and electricity. As per the previous tax, regime these goods are taxed separately by the individual state governments.
Features and Benefits of GST Calculator
Here are some of the essential features and advantages of using a GST calculator:
- It helps users to evaluate GST prices for the net or gross product price.
- It helps users to distinguish between SGST, CGST, and IGST and accurately measure each tax.
- By delivering immediate outcomes, saves time.
- When measuring the cost of goods and services, this lowers the probability of human error.
- It is easy to use and allows you to measure GST in a hassle-free way.
What are different tax heads under GST?
GST can be listed under four headings, including the Central Goods and Services Tax (CGST), the State Goods and Services Tax (SGST), the Union Territory Goods and Services Tax (UTGST), and the Integrated Goods and Services Tax (IGST) (IGST).
- State GST (SGST): Obtained by the Government of the State
- CGST (Central Government GST): Obtained by the Central Government
- Integrated GST (IGST): Obtained for inter-state transactions and imports by the central government
- Union Territory GST (UTGST): Obtained by the Government of the Union Territory
GST Calculation Formula
The taxpayer will use the following formula to measure the GST. After applying GST and extracting GST, the following formula helps to determine the net price of the commodity.
For GST to be added to the base number
- Sum of GST = (Original Cost * GST Percentage) / 100
- Net Price = Original Cost + GST Amount
To exclude GST from the base number
- GST Amount= Original Cost - (Original Cost * (100 / (100 + GST percent)
- Net Price= Original Cost-Amount of GST
How to calculate GST using a GST Calculator at Afinoz? (Method to calculate GST using the GST calculator)
At Afinoz, we provide taxpayers with a dedicated and competent GST calculator tool that helps to measure GST easily. Our tool can be used by taxpayers who want to measure GST with the differential GST rate. The steps to be followed for calculating GST through the GST Calculation Tool are listed below:
- Step 1: As per the requirements, pick GST Inclusive/GST Exclusive.
- Step 2: Enter the original number is entered.
- Step 3: From the drop-down menu list, select the GST rate (5%, 12%, 18%, 28%).
- Step 4: Click on the Calculate button. As per your original requirement, the result will display the total GST number and Pre-GST/Post-GST amount.
GST calculation Example (Calculation of Tax under GST)
Following is a simple illustration for GST Calculation
|Price to be charged on the Invoice||12%||224,000|
GST calculation by Manufacturers:
|Particulars||Rate (%)||Amount Pre-GST||Amount under GST|
|Cost of the product||-||200,000||200,000|
|Final Invoice to the wholesaler||-||278,438||246,400|
The manufacturer saves Rs.160 for 1000 points, i.e., 16% cost savings due to tax changes. There is a cost deduction for producers, who pass this benefit to wholesalers, retailers, and end-consumers along the supply chain.
Calculation of GST by Wholesalers & Retailers:
|Particulars||Rate (%)||Amount Pre-GST||Amount under GST|
|Cost of the product||-||278,438||246,400|
|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 commodity falls due under the GST scheme and a cheaper price for the products must be charged by the end customer at the same profit margin received by wholesalers and distributors.
What is GST Inclusive amount?
The GST inclusive amount applies to the overall value of the product after the original value of the product is included in the GST amount. The tax shall not be paid separately concerning the consumer.
What is the GST Exclusive amount?
GST exclusive amount refers to the value of the commodity after subtracting the GST amount from the GST Inclusive value of the commodity.
Impact on Product Pricing of GST
Central and state governments are referred to as Central GST (CGST) and State GST (SGST) respectively, levying indirect taxes. The seller would charge the buyer taxes for intrastate transactions, such as CGST and SGST, to be paid to the central and state governments, respectively. An example of such a form of GST that demonstrates the effect of GST on product pricing is given below:
|Old Tax System||GST System|
|Price of a product sold from Kanpur to Bhopal = Rs.2,000||Price of a product sold from Kanpur to Bhopal = Rs.2,000|
|VAT @ 10% = Rs.200||CGST @ 5% = Rs.100 + SGST @ 5% = Rs.100|
|Cost of a product sold from Kanpur to Bhopal = Rs.2,200||Cost of a product sold from Kanpur to Bhopal = Rs.2,200|
|Profit = Rs.2,000||Profit = Rs.2,000|
|Selling Price = Rs.4,200||Selling Price = Rs.4,200|
|CST @ 10% = Rs.420||IGST @ 10% = Rs.420|
|Total cost of the product = Rs.4,620||Total cost of the product = Rs.4,420|
The GST Bill is touted to be a landmark tax bill in India. To curb double-taxation and anomalies concerning the same, this Bill is being introduced. Four bills were approved on 29 March 2017. For the full implementation of this Bill, the government has set a deadline of 1 July 2017. A selection of goods and services would become cheaper and the pocket would be heavier for some. However, a multi-tier tax slab with four distinct tax rates of 5 percent, 12 percent, 18 percent, and 28 percent has been placed forward instead of the expected single tax slab. The rationale behind this multi-tier structure is that it is not possible to tax essential goods and services at the same rate as luxury goods and services.
GST Calculator FAQ’s
Ques: If exempted products have a brand of their own, is registration required?
No registration is required if taxable supplies do not exist and only exempt goods are sold.
Ques: Does the sale to a dealer of a pre-owned car require GST to be paid?
Under GST, the sale of a car is seen as a GST supply, and registration is required as such. If the individual is not engaged in any other form of supply, the person is considered to be a casual taxable person valid for only 90 days.
Ques: Do ISDs need to be registered with the GST?
ISDs must be subject to GST registration, whether in the territory of the State or of the Union, from which the taxable supply of goods or services or both takes place.
Ques: What happens if a firms position is altered from ownership to partnership?
New GST registration is required in such cases, as the relationship would have a new PAN.
Ques: How will the GST calculator be used by a buyer?
Enter the net price before GST and enter the GST rate afterward. Total production costs, CGST, SGST, and total tax will be determined.
Ques: How will the GST calculator be used by a retailer/wholesaler?
Enter the production cost/cost of products, percentage of benefit ratio, and GST rate. The overall production cost, CGST, SGST, and total tax will be shown.
Ques: What advantages does the GST calculator have?
When calculating the overall cost of products and services and the tax number, the GST calculator saves time and reduces the chances of human error.
Ques: Who can use the calculator for GST?
A consumer, manufacturer, and wholesaler may use the GST calculator as well.