In July 2017, the Indian government introduced GST (Goods and Services Tax), which abolished all other taxes on goods and services that businesses and individuals had to pay, directly or indirectly. For a business, it is essential to know how much GST tax needs to be paid to avoid any penalty, and the best way to calculate is to use the GST calculator. Using the calculator, you can know the product rate after applying the required tax slab. There are different tax slabs under GST.
We will take you through the insight of GST and how a GST calculator can help you pay taxes.
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What is GST?
GST is an indirect tax presented by the government of India imposed on goods and services. It came into effect on July 1, 2017, abolishing all indirect tax systems that were a burden for sellers and buyers. Some indirect taxes repealed after GST were VAT, Entry Tax, and Octroi.
The Goods and Service Tax (GST) is a national tax imposed on product and service production, distribution, and use. If the annual turnover of your business dealing with goods is above Rs 40 lakhs and Rs 20 lakh for service, you are eligible to pay GST. Moreover, small and large organizations must have a GST Identification Number to register under the GST policy..
Different Types of GST:
There are four different types of GSTs:
- State GST (SGST): Collected by the State Government
- Central GST (CGST): Managed by the Central Government
- Integrated GST (IGST): It is governed by the Central Government for inter-state transactions and imports.
- Union Territory GST (UTGST): It is governed by the Union Territory Government
What is a GST Calculator?
The GST calculator is an online tool that helps you know the total amount of GST due in a month or quarter. Distributors, manufacturers, and purchasers use this online calculating tool for quick results. It assists you in figuring out the product price, either gross or net, for percentage-based GST rates.
What is the Formula, and How is GST calculated?
If you want to add GST to the base amount. The formula is-
GST Amount = ( Original Cost X GST% ) / 100
If you want to remove GST from the base amount. The formula is-
Net Price = Original Cost – GST Amount
To calculate GST using the calculator. You can follow the below steps:
- Step 1- Enter the net price of the service or goods and the GST rate, such as 5%, 12%, 18%, and 28%.
- Step 2- Now click on the calculate button. The calculator will display the total and pre-GST/post-GST amounts.
What are the Benefits of the GST Calculator?
There are different benefits of using a GST calculator. Some of these are-
- It makes it easy for the user to apply the GST rate on products and services before selling.
- It enables users to compute each tax accurately and discern between SGST, CGST, and IGST.
- It saves time.
- Estimating the cost of something lessens the chance of human error.
To Know about Financial calculators
Running a business involves many responsibilities, and you must ensure there are no tax issues. Moreover, you cannot afford to spend time doing calculations manually. As a result, using the GST calculator is the best you can do to get a better and quicker result.
GST Calculator – FAQs
1. What is the GST Inclusive Amount?
Ans. The GST-inclusive amount is the final amount after the GST amount has been deducted from its initial value. The customer is not billed individually for the tax.
2. What is the GST Exclusive Amount?
Ans. It refers to the overall product value after subtracting the GST amount from its inclusive value.
3. Who can use the GST calculator?
Ans. The GST calculator is best for manufacturers, buyers, and wholesalers.
4. Is GST applicable to all goods?
Ans. Not all goods fall under the GST slab. Beauty products, fertilizers, drugs, and others are exempted.
5. How do you calculate 18% GST using a calculator?
Ans. If the product costs Rs 100 and the GST is 18%. So, the calculation will be 100x 18%= Rs 18. So, the net amount is Rs 118.
6. Is the online GST calculator reliable?
Ans. Yes, the GST calculator online is highly reliable.