Want to know more about GST and the ways to calculate it? Want to find ways to calculate the GST amount online? Interested in knowing how to use a GST calculator online? Well, then this article will help you skim through it. In this article, you are going to learn about GST, the formula to calculate it, and how to use a GST calculator.
What is GST and What are its Broad Types?
GST, or Goods and Services Tax, is a form of indirect tax that you pay while buying goods and services. This tax is included in the goods and services you purchase. A GST calculator online can help you calculate the GST amount.
The GST Act was passed and approved by the Indian Parliament on March 29th, 2017.
It was introduced to bring all the indirect forms of taxes under one roof. This made it easier for the government to administer the total tax fund. It put a full stop to black marketing and hoarding. It helped bring uniformity to the country’s taxation system.
Furthermore, it reduced taxes on certain goods and services, which benefited the general public. It reduced the logistics costs by abolishing all the border taxes.
Let us discuss the various types of GST (Goods and Services Tax)
Types of GST
In total, there are four types of GST collected by the government, and they are:
- CGST / Centre GST:
This GST is charged by the central government of India on all the goods and services you purchase.
- SGST / State GST:
This GST is charged by the state government on all the goods and services you purchase.
- UTGST / Union Territory GST:
This GST is charged by the union territory government on all the goods and services you purchase if you belong to any of the union territories.
- IGST / Integrated or Combined GST:
This GST is charged by both the central government and the state government on all the goods and services you purchase.
What is a GST Calculator?
A GST calculator is a tool that helps you calculate the price of gross or net products. It is an online calculator that is already programmed to compute the GST amount. Manufacturers, wholesalers, retailers, and users can use this online, AI-generated software to calculate the tax amount.
What Are the Benefits of Using a GST Calculator Online?
There are many advantages to using a GST calculator, and these are some of them.
- Easy to use:
GST calculators are very user-friendly and easy to use. The calculators that are available online do not require any effort, you just have to enter the figures to calculate the final amount.
All the GST calculators online save your time to a great extent. You don’t even have to wait a second to get the results. They show the tax numbers in no time.
- Free from human error:
Precision is another huge advantage of using a GST calculator online. Unlike manual calculations that turn out to be tedious at times and can give wrong results, these online calculators give you accurate results.
- Bifurcated values:
The GST calculator online gives you bifurcated values, which means it gives you a separate value for CGST and SGST, respectively.
What is the Standardised Formula to Calculate Goods and Services Tax?
According to the GST Act of 2017, there are two formulas for two different situations.
The first situation is for the GST inclusive amount. Here, the GST inclusive amount is the sum of the original price of the product or service and the GST.
The second situation is for the GST exclusive amount. Here, the GST exclusive amount is obtained by not adding the GST amount to the original price of the product or service.
- For the goods and services where GST is included:
GST = cost of the goods or services × GST%/100
It is the cost of goods or services multiplied by the GST percentage divided by 100.
So, net price = Cost of the goods or services + GST amount.
For example, if the original price of a good or service is 5000 rupees and the GST rate is 5%, then by using the above formula, the GST is equal to 250 rupees, and the total amount including GST becomes 5250 rupees.
- For the goods and services where GST is excluded:
GST = Original cost – [Original Cost × 100/100+GST%]
For instance, if the original price of a good or service is 5000 rupees and the GST rate is 5%, then by using the above formula, the GST amount is equal to 238.10 rupees, and the total amount excluding GST equals 4761.90 rupees.
So, net price = Cost of the goods or services – GST amount
How to Use a GST Calculator Online to Calculate Goods and Services Tax?
There are two simpler steps to follow to calculate the GST online.
- The first step is to enter the original price of the goods and services.
- The second step is to enter the product or service’s GST percentage.
After entering these two numbers, you just have to click on the “calculate” button. The GST calculator shows you the GST amount in no time.
A GST calculator is a very handy and easy-to-use device that will help you get the GST value of the products and services you are buying. The GST percentage values are fixed at 0.25%, 3%, 5%, 12%, 18%, and 28%.
Another thing to notice is that in the case of reverse charging, 18% GST is charged, but the GST calculation method remains unchanged. You should be aware of the category (GST inclusive amount or GST exclusive amount) while using a GST calculator to calculate the GST amount.
Visit the official website of Piramal Finance to understand how to calculate the GST online. Read their well-researched blogs, and do not forget to explore their products and services.