How to calculate GST using a GST calculator?

There are many taxes that individuals in India need to pay, ranging from income tax to property tax. Among the taxes levied in the country, the one tax that everybody who purchases any goods or services needs to pay promptly is the Goods and Services Tax (GST). Wondering what the GST tax is? Let’s find out all about it, see how it is calculated, and discuss how an online GST calculator can be useful to compute GST.

What is GST?

GST or Goods and Services Tax is a kind of indirect tax that is levied on the supply of goods and services in India. It is a multi-stage tax, which is collected from the buyer of the goods or services and paid to the government by the seller of goods or the provider of services. GST is a very recent tax, since it was introduced in India only on July 1, 2017, replacing the older versions of indirect taxes such as Value Added Tax (VAT) and sales tax.

Overall, the current GST framework in India covers over 500 services and over 1,300 goods. Some goods and services are exempt from GST. But primarily, these goods and services fall under 5 key GST rate slabs, as listed below.

• 0%
• 5%
• 12%
• 18%
• 28%

How is GST calculated?

Whether GST is included in the value of the supply or excluded from it, the amount of tax can be calculated using a simple formula in each case. Here is the formula you need to use, depending on whether GST is excluded or not.

• If GST is excluded from the supply value

In this case, the formula used is as follows –

GST Amount = (Value of supply x GST rate)/100

• If GST is included in the supply value

In this case, the formula used is as follows –

GST Amount =  Value of supply – [Value of supply x {100/(100+GST%)}]

If this appears too complicated, you can always make use of an online GST calculator to compute the GST each time. This can make this simpler and quicker for you.

What is a GST calculator?

A GST calculator is a simple and easy-to-use online tool that helps you compute the GST amount on different goods and services effortlessly. Buyers, suppliers, small businesses and wholesalers can all make use of an online GST calculator to get a better idea of the amount of tax.

How to calculate GST using a GST calculator?

Here is a step-by-step guide to using a GST calculator. It is easy to use, and is available free of charge online.

1. Enter the net price of the goods or services being supplied.
2. Enter the GST rate applicable on the said product or business services. This could be 5%, 12%, 18% and 28%.
3. Click on the button labeled ‘calculate.’

That’s it! The online GST calculator will compute the amount of tax based on your inputs and display the tax amounts under different heads like Central GST (CGST), State GST (SGST) and Integrated GST (IGST) as the case may be. You can use this information to get a better idea of the final amount to be billed.

Conclusion

Calculating the Goods and Services Tax on different products and services can help you better understand how much your tax liability will be, and also give you a good idea of how the indirect tax system works. And as you can see, an online GST calculator can help you calculate the GST tax on various products and services effortlessly. So, ensure that you make use of this nifty online tool whenever you need it. Alternatively, you can hire GST filing services where professionals such as Morrison Management to help you file your taxes effortlessly.