GST Calculator: All You Need to Know

GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into effect on 1st July 2017; Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. In simple words, Goods and Service Tax (GST) is one indirect tax for the entire country.

The arrival of GST has created a wave of change in the business market in India. Gone are those days when various types of indirect taxes were levied on every sale or purchase. As GST is levied on value addition at each stage, a consumer has to pay only the GST charged by the last dealer or supplier in the supply chain.

GST is categorised into three different parts for easy calculation purposes;

  1. SGST: The State Goods and Services Tax is applicable for sales that are conducted within the state and the revenue for which ultimately goes to the state’s government.
  2. IGST: The Integrated Goods and Services Tax is applicable for movement of goods and sales that are conducted outside the state’s premises and the revenue for which ultimately goes to the federal government.
  3. CGST: The Central Goods and Services Tax is applicable for sales and movement of goods that are conducted within the state and the revenue for which ultimately goes to the federal or the central government.

 

Calculating GST is extremely simple; this formula says it all;

GST Amount = (Original Cost x GST %) /100;

For e.g. A goods or service is sold at the rate of Rs.500. GST rate is 18%.

Then the Gross amount of the goods or service = 500 + [500 x (18/100)] = Rs.590

To simply the process to calculate GST, the GST online calculator can be made use of. While implementation of GST will ensure a transparent manner of collecting revenue and improve tax compliance, GST calculator will save time and give instant results. There is low to zero chances of human error when using an online GST calculator to compute the total cost of a good or service. The GST online calculator tool also gives the user an option to either add or remove GST rate from the net price of the product.

 

Having known about GST in a brief and how to calculate GST, it would be beneficial to know the salient features of GST in the first place.

  • GST helps in setting an international standard as well as maintaining transparency throughout the tax structure right from the manufacturer to the consumer.
  • The primary objective of implementing GST is to prevent double taxation of commercial goods.
  • The reduction in tax will bring down the production cost for companies. Inflation is expected to decrease after the implementation of GST.
  • It is also said that there will be a decrease in tax liability. Reduction in price is expected as input tax credit is available against output tax. Following taxes will be set-off with the same or with the different tax input credits

There are a wide range of GST forms, based on its applications. Let’s take a look;

  1. GSTR-1: This form is used by traders and suppliers to provide information on outward supplies
  2. GSTR-1A: If the purchaser is making any alterations to the form GSTR-1, those will automatically reflect in GSTR form 1A. These changes are verified by the supplier. Upon acceptance of form GSTR-1A, the GSTR-1 is filed.
  3. GSTR-2: When the supplier raises a GSTR-1 form, it is validated by form GSTR-2. GSTR-2 is received as GSTR-2A and upon confirmation it becomes GSTR-2 filed by the purchaser.
  4. GSTR-3: A consolidated version of GSTR-1 and GSTR-2. This form essentially reflects your total tax liability.
  5. GSTR-9: A comprehensive form that reflects all the returns that an individual has made during that year. Information on multiple purchases and sales that include the components of SGST, CGST, and IGST are also mentioned here. If you need to omit a certain point or have missed out on filing a return, you can make use of this form to do so.
  6. GSTR-10: If your GST return has been nullified or cancelled for some reason, you will be required to make use of this form. The timeframe within which you have to file is three months.

 

It is to be noted that Delayed filing or non-filing of GST attracts penalties;

Late filing attracts penalty called late fee. The late fee is Rs. 100 per day per Act. So it is 100 under CGST & 100 under SGST. Total will be Rs. 200/day*. The maximum is Rs. 5,000. There is no late fee on IGST in case of delayed filing. Along with late fee, interest has to be paid at 18% per annum. It has to be calculated by the taxpayer on the tax to be paid. The time period will be from the next day of filing to the date of payment.

Simultaneously, If you don’t file any GST return then subsequent returns cannot be filed. For example, if GSTR-2 return of August is not filed then the next return GSTR-3 and subsequent returns of September cannot be filed.  Hence, late filing of GST return will have a cascading effect leading to heavy fines and penalty

 

GST Calculator – Frequently Asked Questions

Questions Answers
What is GST? GST is an Indirect Tax which has replaced many Indirect Taxes in India
What are the various types of GST rates applicable GST is levied at either 5%,12%,18% or 28% as applicable
What is IGST? IGST or Inter-State GST is levied by the Central Government on inter-state supply of goods and services. 
What is SGST? SGST or State GST is applied for transactions within the state.
What is CGST? CGST or central GST is applied for transactions within the state too, but the revenue in this case goes to the central government.