FAQ's on Calculating Applicable GST on your Sales

Author: John Den Mark

What is the meaning of GST?

GST stands for Goods and Service Tax which is the single indirect tax system prevailing in India for 2 years. Implemented on 2nd July 2017, this single indirect tax mechanism is favorable for the taxpayers who earlier used to file several indirect taxes in the country. The single tax mechanism has reduced the number of tax compliance for the taxpayer.

Some of the indirect taxes replaced by the GST are Central Excise, Duty, VAT, Entry Tax and Octroi.

GST Calculation On Your Sale

GST is a collective tax levied on the manufacture, sales, and consumption of goods and services in India. Under the surveillance of GST, each registered taxpayer is allotted a GST Identification Number (GSTIN) which is later referred to for imposing the tax.

  • What are the kinds of GST?

There are four different kinds of GST levied on the sales of Goods and Services in India:

  1. State GST

  2. Central GST

  3. Integrated GST

  4. Union Territory GST

  • How to calculate applicable GST?

With GST already ruling the nation, taxpayers must know how Goods and Service Tax is deducted from their earnings. Before starting the calculation taxpayer must know that GST is deducted based on the GST rate applicable to a certain commodity or service. The different slabs according to which GST is deducted are 5%, 12%, 18%, and 28%.

The calculation is further explained with a simple example:

If a product costs Rs. 2000 and the GST applicable to that product is 18%, then the overall price of that particular product will be Rs. 2,360 (2000 + (2000 * 18/100)).

  • What is the Formula to calculate GST?

  1. Adding GST to the base amount,

Add GST

GST Amount = ( Original Cost * GST% ) / 100

Net Price = Original Cost + GST Amount

  1. Removing GST from the base amount

Remove GST

GST Amount = Original Cost – (Original Cost * (100 / (100 + GST% ) ) )

Net Price = Original Cost – GST Amount

  • What are the steps to use a GST Calculation Tool?

GST Calculator is offered by many software and websites that will guide to an easy GST calculation via Gen GST Calculator with correct results. Taxpayers who wish to calculate their applicable GST beforehand can opt for either of the options available. Some of the sources are paisa bazaar, rapid tables, calculate stuff, etc.

Here are the steps to calculate the GST through a GST Calculation Tool:

  • Step 1: Choose whether GST is Inclusive or Exclusive (as per the requirement)

  • Step 2: Input the valid amount

  • Step 3: GST rate slab is mentioned as a drop-down. Select one from the list.

  • Step 4: The GST calculating tool will show you the accurate figures of GST applicable, Pre/Post GST amount on your earnings from sales.

  • Which amount is considered GST Inclusive amount?

The amount inclusive of GST is the total amount of the product after including GST. For such products, customers are not liable to give any additional amount as tax. Only the original value of the product is chargeable from the customer.

  • Which amount is considered the GST Exclusive amount?

GST exclusive amount means the total value of the product does not include any GST amount. It is calculated by subtracting the GST amount from the GST Inclusive amount of the product.

Note: Also you can file GST return via Gen GST software. the software completely designed and developed by SAG Infotech Pvt. Ltd. The Gen GST has been entirely developed as per the new tax guidelines by the Government of India. The software also helps generate an invoice via Gen GST Billing Software.