Since its implementation over five years ago, GST has become a cornerstone of India's trade and commerce landscape. With monthly GST collections surpassing ₹1.6 lakh crore mark and total registrations nearing 1.4 crore, it's clear that this tax regime is here to stay.
Whether you are a retailer, wholesaler, manufacturer, or consumer, you need to know how to calculate GST from the total amount. Although the process of calculating the GST is super easy. It becomes necessary for you to first understand the formula behind its calculation.
To calculate the tax component, you must find out whether the price of the product or service is inclusive or exclusive of GST. The appropriate formula for calculating GST will depend on this distinction.
If the price is inclusive of GST, then the following formula will apply:
GST Amount = Value of supply – [Value of supply x {100/(100+GST%)}]
If the price is exclusive of GST, then the following formula will apply:
GST Amount = Value of supply x GST%
Here, the value of supply means the transactional value of goods or services, that is, the price paid or payable by the buyer to the seller.
Where the tax is already included in the invoice value, the GST shall be computed as follows:
Note: Online GST calculator tools are also available to help you calculate the tax component on a supply value, or separate it from the inclusive amount. To calculate, all you need is the value of supply, GST rate, and profit margin, if any.
How to Calculate GST Percentage
The GST council is responsible for determining the rates that apply to all products and services under the GST regime. Currently, there are four different rates of GST in effect - 5%, 12%, 18%, and 28%. Each rate applies to specific categories of products or services.
There are also nil-rated goods and services falling under the category of zero tax rate. Meaning that they attract no GST.
If you are unsure about the GST rate applicable to your product or service, you can click here to visit the CBIC-GST website and find out.
Now that you have learned how to calculate GST, you can easily distinguish between any amount's cost and tax components. This knowledge is valuable for managing personal finances, especially when it comes to finding out how much GST you pay on investment transaction costs. However, with Fi, you can enjoy savings since no commissions are involved in investing. You can conveniently invest in Mutual Funds daily, weekly, or monthly through automatic payments or SIPs without incurring any extra costs. Additionally, Fi offers flexibility with no penalties for missed payments. Check it out today!
Using a GST calculator offers many advantages, such as quick and precise computation of net and gross product prices and a clear differentiation between SGST, CGST, and IGST. The calculator delivers highly accurate results instantly.
GST calculators are designed to enable anyone to accurately calculate GST and with ease. Whether you're a consumer, retailer, wholesaler, or manufacturer, these calculators are a helpful tool for separating the tax component from the total price of a product or bill.
GST calculator is an online tool that is readily available to help you quickly calculate the total amount of GST payable for any given month or quarter. Whether you're a buyer, retailer, wholesaler, or manufacturer, this tool can significantly aid your accounting processes.
A GST calculator works by calculating the amount of GST based on the original amount you enter and the GST rate you select. The calculator will then generate a clear breakdown of the resulting SGST, CGST, or IGST amounts, making it easy to understand the total tax applicable.
To calculate the tax component, you must find out whether the price of the product or service is inclusive or exclusive of GST. The appropriate formula for calculating GST will depend on this distinction.
If the price is inclusive of GST, then the following formula will apply:
GST Amount = Value of supply – [Value of supply x {100/(100+GST%)}]
If the price is exclusive of GST, then the following formula will apply:
GST Amount = Value of supply x GST%
Here, the value of supply means the transactional value of goods or services, that is, the price paid or payable by the buyer to the seller.
The formula to calculate TDS (Tax Deducted at Source) on GST (Goods and Services Tax) is as follows:
TDS Amount = GST Amount * TDS Rate
