GST stands for Goods and Services Tax levied by the Central Government of India
on sellers, manufacturers, and users of the consumer goods and services. The GST
is based on the Value Added Tax (VAT) principle.
Since the GST is charged on the addition of the value at each stage, the end-user
needs to pay only the GST charged by the last supplier or dealer in the supply chain.
The implementation of the Goods and Services Tax (GST) has affected many
aspects of business operations ranging from the pricing of the products to tax
compliance.
Hence, the need to calculate GST property comes into the frame.
In the same context, the need for the online GST calculator comes into the picture.
The price of the services and goods can be computed while using the online GST
calculator. The online GST calculator is also available on many third-party websites
free of cost to calculate the GST without issues and instantly.
GST tax calculation formula at a glance
For calculating the GST on your availed goods and services, all that you need to do
is – provide the net amount of a service or good and the applicable GST rate which
is 5%, 12%, 18% and 28% in the wizard.
Once you have entered the above details, the next thing will be clicking on the
‘calculate’ button and quickly get to know the good and service gross price. Here’s
how the GST calculation is represented by an example such as:
Suppose a service or good is sold at a price tag of Rs.500 and for that, the
applicable GST rate is 18%.
Thus, the gross value of the goods or service will be 500 + [500 x {500 x (18/100)}
which is Rs.590.
GST calculation formula
- Add GST:
GST value = (Original cost x GST%)/100
Net price = Original cost + GST amount
- Remove GST
GST amount = Original cost – [Original price x {100/(100+GST%)}]
Net price = Original cost – GST amount
What are the benefits of implementing GST policy in India?
The immediate benefit of using the online GST calculator is to calculate the GST on
the purchase/usage of the goods and service. The introduction of the GST policy in
India has some advantages such as:
- The GST calculator not only assists in setting an international standard but
also promises transparency inside out of the tax flow with everyone involved
such as manufacturer to the consumer - Helps to keep off the double taxation of commercial products
- It also helps increase competition among sellers and manufacturers to
produce high-quality products to boost the country’s GDP - The tax reduction will bring down the companies’ production cost and also
pitches competition among even exporters - It is expected that inflation will come down after the complete implementation
of the GST in the country - It will also assist to decrease the tax liability.
The immediate benefits of the GST are:
- Bringing about a uniformity in taxation
- Helping the Central Government revenue find flexibility
- Will help the dropping of the taxes
- Lead towards simpler, non-complex and lesser number of compliances
- Will motivate common procedures for taxes’ refund
- Creation of a unified common market in the country
- Export enhancement and investments
- A large number of job generation due to the increased economic activities.
The Bottom Line
You are now aware of the concept, usages, and benefits of the GST calculator and
GST. It will help you file taxes and so much more if you have a business or if you are
a consumer.