• GST Calculator

    GST stands for Goods and Services Tax which has been levied by the Government of India at the national level. Online GST calculators which are offered by several third-party websites can be used to ascertain the cost of GST which is applicable.

    GST is the Goods and Services Tax levied by the government of India on the manufacturers, sellers, and consumers of consumer goods and services at the national level. It is based on the principle of Value Added Tax (VAT). 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.

    Implementation of GST has affected various aspects of a business operation ranging from product pricing to tax compliance. This is where the online GST calculator comes in handy. The cost of goods and services can be calculated using an online GST calculator that is available on many third-party websites.

    GST Tax Calculation Formula

    All one needs to do is input the net amount of a good or service and the applicable GST rate (5%, 12%, 18% or 28%) into the tool. Click on the 'Calculate' button and instantly get the gross price of the good or service. GST calculation is represented by the below example:

    A goods or service is sold at the rate of Rs.500. GST rate is 18%. Gross amount of the goods or service = 500 + [500 x (18/100)] = Rs.590

    Formula for GST calculation:

    • Add GST:
    • GST Amount = (Original Cost x GST%)/100

      Net Price = Original Cost + GST Amount

    • Remove GST:
    • GST Amount = Original Cost - [Original Cost x {100/(100+GST%)}]

      Net Price = Original Cost - GST Amount

    Impact of GST on Product Pricing

    Indirect tax will be levied by Central and State Government called Central GST (CGST) and State GST (SGST), respectively. In the case of intra-state transactions, the seller will collect CGST and SGST from the buyer which will be paid to the Central and State Government, respectively. Listed below is an example of the impact of GST on product pricing:

    Old Tax System GST System
    Price of a product sold from Pune to Jaipur = Rs.1,000 Price of a product sold from Pune to Jaipur = Rs.1,000
    VAT @ 10% = Rs.100 CGST @ 5% = Rs.50 + SGST @ 5% = Rs.50
    Cost of a product sold from Pune to Jaipur = Rs.1,100 Cost of a product sold from Pune to Jaipur = Rs.1,100
    Profit = Rs.1,000 Profit = Rs.1,000
    Selling Price = Rs.2,100 Selling Price = Rs.2,100
    CST @ 10% = Rs.210 IGST @ 10% = Rs.110
    Total cost of the product = Rs.2,310 Total cost of the product = Rs.2,210

    Know GST Bill Rates and Its Calculation

    The GST Bill is touted to be a landmark bill with respect to taxation in India. This Bill is being implemented with the intention of curbing ‘double-taxation’ and irregularities regarding the same. On 29 March, 2017 four bills were approved. The government has set a deadline of 1, July 2017 for the complete implementation of this Bill. A number of products and services would become cheaper and others would become heavier on the wallet. However, instead of the expected single tax slab, a multi-tier tax slab has been put forth with four different tax rates of 5%, 12%, 18% and 28%. The justification behind this multi-tier system is that essential goods and services cannot be taxed at the same rate as luxury products and services.

    However, there are a number of confusions and doubts regarding the calculation of GST on products and the difference that would be made with the implementation of this landmark Bill. It is essential to note that the GST Bill has two components to it - one that is levied by the Centre which is known as CGST or Central GST and the other which is levied by all States known as SGST or State GST. Rates for each would be approved based on revenue and acceptability, among other factors. Except for those goods and services that have been exempted, SGST and CGST will be applicable on all goods and services. Both Centre and States would have jurisdiction for the determination of tax rates and for all taxpayers based on the threshold for products and services that have been prescribed.

    Tax Calculation under GST

    Under the GST regime, manufacturers and dealers can benefit from input tax credit. Below is an example to show the difference in the amount of tax payable under the old tax system and the GST system:

    Value to Manufacturer Old Tax system GST System
    Cost of production Rs.2,00,000 Rs.2,00,000
    Profit Margin of 10% Rs.20,000 Rs.20,000
    Excise duty of 12% Rs.24,000 -
    Total production cost Rs.2,44,000 Rs.2,20,000
    VAT of 12.5% Rs.30,500 -
    SGST of 6% - Rs.13,200
    CGST of 6% - Rs.13,200
    Invoice value for manufacturer Rs.2,74,500 Rs.2,46,400
    Value to Wholesaler
    Cost of goods Rs.2,74,500 Rs.2,46,400
    Profit margin of 10% Rs.27,450 Rs.24,640
    Total Value Rs.3,01,950 Rs.2,71,040
    VAT of 12.5% Rs.37,743.75 -
    SGST of 6% - Rs.16,262.40
    CGST of 6% - Rs.16,262.40
    Invoice value to wholesaler Rs.3,39,693.75 Rs.3,03,564.80
    Value to Retailer
    Cost of goods Rs.3,39,693.75 Rs.3,03,564.80
    Profit margin of 10% Rs.33,969.375 Rs.30,356.48
    Total Value Rs.3,73,663.125 Rs.3,33,921.28
    VAT of 12.5% Rs.46,708 -
    SGST of 6% - Rs.20,035.28
    CGST of 6% - Rs.20,035.28
    Invoice value to retailer Rs.4,20,371.125 Rs.3,73,991.84

    From the example, it's clear that subsuming excise duty is favourable to the end consumer. There is a reduction in cost for manufacturers, wholesalers, and retailers due to the subsuming of VAT, Service Tax, and Excise duty. Due to the reduction in cost, there will be a reduction in input tax credit.

    Tax Calculation for Inter-State Sales

    Integrated GST (IGST) will be levied by the Central Government on inter-state supply of goods and services. In the case of inter-state transactions, IGST will be transferred to importing state. In the old tax system, CST was charged over and above VAT and the excise duty for movement of goods between 2 states. In the GST system, IGST is the only tax levied on goods moving across state borders. Below is an example to understand the IGST system:

    Value to Manufacturer Old Tax System GST System
    Cost of goods Rs.1,00,000 Rs.1,00,000
    VAT of 12.5% Rs.12,500 -
    IGST of 12% - Rs.12,000
    CST of 2% Rs.2,250 -
    Total value to retailer Rs.1,14,500 Rs.1,12,000

    As per the above example, it is clear that under the GST system, manufacturers, wholesalers, and retailers will see reduction in cost whether it is inter-state or intra-state sales.

    Benefits of using GST Calculator

    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 tool also gives the user an option to either add or remove GST rate from the net price of the product.

    General Benefits of implementing GST in India

    Implementing a single indirect tax is beneficial in many ways such as:

    • It not only helps in setting an international standard but also ensures 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. GST is expected to ultimately increase competition among the manufacturers and sellers to provide high-quality goods which in turn will boost the GDP of the country.
    • The reduce in tax will bring down the production cost for companies. Thus, increase the competition among exporters.
    • 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
    CGST CGST and IGST
    SGST SGST and IGST
    IGST IGST , CGST and SGST

    Changes

    • As observed in the previous examples, there have been changes noted in the type of tax and amount imposed.
    • Excise is generally applicable on capital goods during production used by manufacturer. Under the new Bill, excise on capital goods will be subsumed as there will only be a single rate of tax for each type of product.
    • Due to the subsuming of Service Tax, VAT, Excise, there will be a fall in the cost of wholesalers, manufacturers and retailers. This will in turn reduce the total cost to the manufacturer due to a reduction in procurement cost.
    • There will also be a fall in input tax credit for the retailer/wholesaler under GST.

    Therefore, as observed there will be a fall in prices for the manufacturer. However, changes in GST rates will depend on the products and services.

    Returns of GST for Businesses in India

    Multiple GST return forms have been assigned to taxpayers from multiple sectors in India. The GST Council, in order to render the process of compliance easy has introduced multiple ramifications to the GST Act that originally came into being.

    To get into the core of GST aspects, let us first understand its three primary subparts:

    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.

    Filing GST Returns

    In India, if you want to file your GST return, you will be required to do so on the portal itself. With the modern age of digitisation, it has now become easy to file returns online without any hassles, owing to the Goods and Services Tax Network or GSTN. GSTN is essentially a non-profit entity that offers its impactful information technology to the Indian Government in order for service users to comply with the technicalities with ease. In order to back the implementation of GST in India, this entity was established! When an organisation or a business registers itself online, they are provided with a certain GST Identification Number. This number is vital as it is required at the time of filing returns. If you do not have any returns to file (in case of NIL returns), even then you will be obligated to file your GST returns on a quarterly or monthly basis.

    How Businesses Operate Under the GST Regime

    If you are business owner in India, you will be well aware of the fact that GST has subsumed all the other indirect taxes and has supported the Indian economy’s motto - ‘’One Nation One Tax’’. Having said that, if the yearly turnover of your business is exceeding the amount of Rs.2 million, you will have to register your trade under the GST regime. The turnover amount pertaining to India’s northeastern states stands at Rs.1 million.

    Types of GST Forms

    From GSTR-1 to GSTR-11, there is a wide array of GST forms that multiple sectors need to make use of. Let us look at them in detail.

    1. GSTR-1: This form is used by traders and suppliers to provide information on outward supplies. If you have registered your business under GST, you will be required to fill this form invariably.
    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 further placed under the verification of 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.

    News About GST Calculator

    • Infosys Set to Blueprint New GST Return Forms

      Infosys is officially the software vendor for the Goods and Services Network (GSTN). With respect to that, Infosys has recently been asked by GSTN to launch a new design of Goods and Services return filing form.

      According to Modi, the GST Council has requested the design of a simpler GST return form in order for traders and dealers to have an easy and effective experience while filing their GST returns. Hence, Infosys has been directed to take care of the project.

      The newly designed Goods and Services Tax return form is expected to get instituted in the next 4-6 months, for the traders and dealers who pay the indirect tax via the established network. For simplification of the whole procedure and for smaller taxpayers, 18 countries have been identified by the GoM to formulate a uniform accounting software. According to the rules established by GST earlier, the Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) will be paid by the e-commerce firms from 1 October 2018.

      According to the rules, e-commerce companies and firms will be required to deduct TDS up to 1 per cent state GST and 1 per cent central GST on intrastate supplies exceeding Rs.2.5 lakh.

      26 September 2018

    • Note Ban and GST Implementation Causes Concerns for Sector’s Exports and MSME Credit

      Credit to MSMEs is recovering well from the trailing effects of the Goods and Services Tax and the note ban imposed in 2016, according to a study conducted by the Reserve Bank of India. MSME credit recorded healthy growth over the past few quarters, and recovery has been good since the declines in late 2017. It is now reaching mid-2015 levels. However, the latest data released by the Reserve Bank of India has shown that credit to MSMEs in June fell by 2.4% in comparison with March 2018. It did however, recorded year-on-year growth of 0.7% in June 2018 in comparison with June 2017. The report said that demonetisation contributed to a further fall in the already declining credit growth in the MSME sector, adding that the implementation of the Goods and Services Tax did not have a major impact on the overall credit to MSMEs.

      11 September 2018

    • Benefits Offered by Goods and Services Tax Encourage Firms to Absorb Unlisted Units

      Unlisted units are being increasingly absorbed by companies so that their holding structure is simplified and they benefit from the Goods and Services Tax. Over the last few weeks, a number or listed entities, like Orient Refractories, Hindustan Unilever, Hindustan Foods, and Lux Industries, have purchased a few of their unlisted businesses, making it a move which is believed will be of benefit to the shareholders of the companies. The EVP of ICICI Securities, Ravi Sardana, said that the trend is an encouraging one due to the fact that the holding structure will be simplified as their common businesses will be brought to one place so that related-party transactions can be reduced and political conflicts of interest can be done away with. He added that it shows good corporate governance.

      3 September 2018

    • No GST on fortified toned milk, but treated tamarind kernel powder to attract 5% tax

      The Goods and Services Tax (GST) will not be applicable on fortified toned milk and supply of non-sealed drinking water. However, treated tamarind powder will attract a GST of 5%. The 3 product categories are part of the list which consists of 11 items. The Ministry of Finance has tried to clarify the doubts in regards to these 11 items on the topic of implementation of the Goods and Services Tax (GST). Other product categories in the list include sugar which is processed from cane and beet, wipes using spunlace non-woven fabric, plasma products, etc. In two different circulars earlier, the Ministry of Finance had issued clarifications pertaining to the application of the Goods and Services Tax (GST) on products which are related to fertilisers and oil refinery industries.

      A senior official from the Ministry of Finance said that they are hoping that all 3 circulars will help to bring down the number of litigations and at the same time also help promote the ‘Make in India’ scheme. Tax Partner at EY, Abhishek Jain said that the rate clarifications will be required to address the vagueness of the rates that are being by some of the major industries including the automotive industry, fertilisers industry, oil refineries, and so on. He further added that this would also help in bringing uniformity in the rates which are charged by different players.

      31 August 2018

    • IMF asks India to consider simpler GST rate structure

      The International Monetary Fund (IMF) has recently described the Goods and Services Tax (GST) as a “milestone reform” in India’s tax policy. However, it has pushed for a simplified tax structure and the main reason for that is that multiple rate structure and other features might give rise to high compliance and administrative costs. The International Monetary Fund (IMF) said in one of its annual country reports that a dual rate structure with low standard rate and an additional higher rate on selected items can prove to be progressive and help preserve the revenue neutrality.

      The newly implemented indirect tax regime levied on the supply of goods and services in India came into effect on 1 July 2017. The IMF is of the opinion that the Goods and Services Tax (GST) is a milestone reform in the tax policy of India. It has taken the significant step of unifying and harmonising a number of indirect taxes across all the states in the nation that were levied by the states as well as the central government. A dual rate structure with low standard rate and an additional higher rate will help preserve the revenue neutrality and at the same time streamlining exemptions will further help to improve and reduce the compliance and administration costs. The IMF also added that with the consumption basket of the rich taxed at higher rates than that of the poor, the Goods and Services Tax (GST) as presently designed has an effective tax rate rising with household consumption.

      27 August 2018

    • Over 2 Lakh non-filers from 2017-18 Paid Taxes Amounting to Rs.6,416 Crore

      As a result of the demonetisation of 2016, approximately 2.09 lakh individuals failed to file their tax returns for the financial year 2017-18. These individuals collectively paid around Rs.6,416 crore in taxes this year.

      According to the reports from the Income Tax Department over 3 lakh individuals who had made cash deposits over Rs.10 lakh had not filed their taxes before the due date. The non-intrusive campaign led by the department led to a 18% increase in collection of direct taxes amounting to Rs.10.03 trillion. Similarly there was also an increase in collection of personal self-assessment tax and personal advance tax by 29.9% and 23.4% respectively.

      24 August 2018

    • GST Council accepts ‘transaction value’ to tax hotel tariff

      The GST Council has conceded to the year-long demand of the hotel industry to determine the leviable tax rate on the basis of the ‘transaction value’. This ascertains that the end-users of the service will not be charged at a higher tax rate for their stay at a hotel. The hotel industry had been lobbying for this change ever since the Goods and Services Tax (GST) was rolled out last year in the month of July. The use of ‘declared tariff’ for determining the tax rate which is meant to be charged to the customers would mean that the customers would have to pay taxes at a higher rate. This situation would be true even if the room tariff fell under a lower slab. The rates at which tax is charged for hotels are 12%, 18%, and 28%.

      The change has been notified by the centre as well as the states. The ‘declared tariff’ has been replaced with ‘value of supply’ which is equivalent to the transaction value. However, experts are of the opinion that the change should not have been restricted to just the room tariffs and should have been implemented on the restaurants inside the hotels as well. There are 3 tax slabs faced by hotels. The first one is for rooms with daily tariffs of Rs.1,000 to Rs.2,500 at 12%. The second one is for the rooms with daily tariffs of Rs.2,500 to Rs.7,500 at 18% along with input tax credit. The third one if for the rooms with daily tariffs of more than Rs.7,700 at 28% along with input tax credit.

      23 August 2018

    • GST Council cuts rates: Electrical appliances to get cheaper

      In the latest GST Council meeting held on the 21st of July, the council has slashed the tax rates on several general use items. These items include washing machines, TV, refrigerators, etc. Conceding the year-long demand, the Council has also considered putting sanitary napkins under the exempted category. The newly implemented tax rates have been made effective from the 27th of July. Reportedly, the new rates have been estimated to cost the government exchequer an estimated amount of about Rs.7,000 crore.

      In the last GST Council meeting that was held in January 2018, the Council had revised the rates of 29 items. Earlier, the mammoth rationalisation decision was taken in the month of November 2017 when more than 200 items were brought under the lower tax brackets from 28%, 18%, and 12%. However, the biggest cut in tax rates came in white goods. As per the decisions taken in the 28th GST Council meeting held on 21 July 2018, rates of 17 white goods have been brought down from the highest tax slab of 28% to 18%. These items include TVs, refrigerators, washing machines, grinders, juicer mixers, hair dryers, vacuum cleaners, shavers, electric irons, and so on. Simpler return filing process method was approved for entities enrolled under the Goods and Service Tax (GST) regime. The rates applicable on paints, wall putty, and varnish have also been slashed to 18% from 28%. In addition to these, the Council also clarified that the GST charged for hotels will be calculated on the actual tariff rates and not on the printed rates. Even the GST applicable on leather items has been slashed from 28% to 18%. However, no decision has been taken on the sugar cess. It is to be decided in the next Council meeting.

      20 August 2018

    • Experts say, new tax appeal rules will bring down litigation

      After the announcement of the new tax appeal rules, tax experts came up with the opinion that the higher the threshold will be set by the finance ministry for filing appeals over tax disputes, the lower will be the load on the tribunals and courts. It will help to reduce the litigation and also free up officials who would be able to focus and work on high value cases. They also added that this move will help reduce the cost of tax dues recovery and improve the ease of doing business in the nation at the same time. After the launch of the new tax appeal rule, Arun Jaitley said in a tweet that this move will lead to the revenue department withdrawing 29,580 appeals before various platforms. He added that this move reduces litigation by 37%.

      The increase in the threshold for filing appeals in the case of the Supreme Court is the sharpest with an increase from Rs.25 lakh to Rs.1 crore. In the case of tribunals, the threshold has doubled from Rs.10 lakh to Rs.20 lakh. The same for high courts has increased from Rs.20 lakh to Rs.50 lakh.

      16 August 2018

    • GST Council to consider rate cut on items with low revenue impact

      A reduction in the tax rates of a number of items might be considered by the Goods and Services Tax (GST) Council in their upcoming meeting on 21 July 2018. The items that have been shortlisted are those with low revenue impact. This decision has been taken as a part of the tax rationalisation exercise of the Council. Some of the items that could be considered for the reduction of tax rates might possibly include handicrafts, sanitary napkins, and handloom goods. Certain services might also come under the tax rate cut.

      A number of stakeholders and industry bodies have been constantly demanding the duty cut on items. Most of the item are linked to general health and employment generation in unorganised sectors. An official said that the Council will be taking the demand of the stakeholders under consideration and will take up the issue of rationalisation of taxes on a number of goods and services. The official also added that the main focus will be on the items and services that are up for general consumption and have a low impact on the revenue. The current rate at which the Goods and Services Tax (GST) is charged on handloom products, sanitary napkins, and handicraft products is fixed at 12%. Under the GST ambit, there are 4 tax slabs. They are 5%, 12%, 18%, and 28%. The Goods and Services Tax (GST) was rolled out last year the month of July and it had subsumed more than a dozen local taxes and other charges that were levied on goods and services.

      8 August 2018

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