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GST: All You Need To Know About GST Calculators

Goods and Services Tax or GST pertains to the indirect tax imposed on the provision of products and services. As of 1 July 2017, GST was established as a unified tax framework in our country and it has substituted all other indirect taxes in India. The government adopted the GST Act at the 2017 budget speech, which was sanctioned by on 29 March 2017, by the parliament.

Multiple large and small organizations are expected to obtain a GST unique identifier or also known as GSTN (GST Number) or GSTIN (Goods and Services Tax Identification Number) to be listed under the GST regulation. Where some form of selling purchase has taken place between states (Interstate), the Integrated GST is levied.  Central GST and State GST are collected for all intra-state selling.

The GST was imposed on the vendors, consumers, and manufacturers of products and services on a national scale by the Indian government. GST is originated from the definition of Value Added Tax ( VAT), meaning that it is levied at each and every point and the customer will pay the GST sum as charged by the previous distributor or seller in the distribution network.

Benefits Of GST

Listed below are some of the benefits of GST implementation in India

  • The primary objective behind GST implementation is the elimination of double taxation on manufactured products. It encourages diversity between manufacturers and sellers to deliver high-quality goods that, in turn, aid enhance the nation’s economy.
  • Due to tax reduction because of GST, the cost of manufacturing for production companies comes down as well as increases competition between exporters.
  • One of the main benefits is that it promotes transparency between the customers and manufacturers.
  • Post GST implementation the problem of inflation is expected to decrease.
  • There is also a reduction in tax liability.

GST Calculation Using A GST Calculator

Under the current tax system, taxpayers can educate themselves about the various available GST rates for multiple categories. There are 0 percent, 5 percent, 12 percent, 18 percent, and 28 percent when determining GST, they are crucial.

Listed below are the types of GST

  • CGST – Central Goods and Services Tax (Tax collected by the central government)
  • SGST – State Goods and Services Tax (Tax collected the state government )
  • IGST – Integrated Goods and Services Tax (Tax Collected by the central government for interstate distribution of goods)
  • UTGST – Union Territories Goods and Services Tax (Tax collected by the union territory government)

GST applies to interstate goods where the vendor of the good or service is in a different part of the country and the goods are delivered to another part of the country. In such a scenario, CGST and SGST are imposed at an equivalent rate for interstate distribution.

Formula For GST Calculations

An individual can use a particular formula to determine GST. The formula is designed to determine the total cost of the product just after the implementation of GST and also helps to eliminate GST.

Following is the formula for calculating GST

Step-1

Add the GST Tax

GST amount = (original/primary cost x GST percentage) / 100

Net Price = Original/primary cost + GST sum

Step-2

Remove the GST Tax

GST Sum =  Original/primary cost – [original/primary cost x {100/(100+GST percentage)}]

Net Price = Original/primary cost – GST sum

Using Online GST Calculators

Since the advent of the goods and service tax, many websites and online portals have been launched to calculate GST. These GST calculators have proved to be extremely helpful and apart from saving time, the possibility of man-made errors is eliminated.

  • Choose either the GST exclusive or the GST inclusive option as per your requirement.
  • Put in the original/primary price of the product in question.
  • Choose the GST rate according to the rules and regulations stated beforehand.
  • Click the “calculate” button and the answer will be displayed on the screen.

GST Exclusive cost pertains to the price of the items by deducting the total amount of GST from the GST Inclusive price of the items.

GST inclusive amount applies to the overall price of the items after the GST sum has been included in the item’s original cost. The tax shall not be imposed separately on the consumer.

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