GST Calculator: How to Calculate Your GST Amount in India?

GST or Goods and Services Tax came into effect on 1st July 2017. It simplified the taxation system by replacing indirect taxes. It is a comprehensive, multi-staged and destination-based taxation system levied on the supply of goods and services.

It is imperative to calculate GST in advance to remain tax compliant. Under GST policy, a high-value interest rate is levied on any default in tax payment. In addition to this, calculating GST in advance also helps a business owner to set aside the monthly or annual budget and avoid any dues to increase tax liabilities in future.

Business owners may find it overwhelming to calculate GST. Using a GST calculator online makes it easier. Being completely online, it reduces human error by giving accurate results and saves time.

How to calculate GST by using the GST calculator online?

Business individuals like manufacturers, wholesalers, retailers and others can calculate GST easily by following the below-mentioned step-wise guide:

Step 1: Enter the net price of the service or goods

Step 2: Add the GST slab such as 5%, 12%, 18%, 28% in the online calculator

Step 3: Click on the “calculateā€ button to get the GST amount on goods and services

Advantages of using a GST calculator online

Using a GST calculator online simplifies the tax calculation. Following are the benefits:

  • It helps an individual find out the product’s gross or net price on percentage-based GST rates.
  • It provides accurate results by bifurcating the rates between CGST, SGST and IGST.
  • It saves time and reduces human error while computing the tax on goods or services.

It is essential to determine certain factors before using a GST calculator online to make it easier for an individual to calculate GST like a pro. Here is a five-step guide:

  1. Determine the HSN or SAC code

HSN is an international system of identifying goods. At the same time, SAC is the system of determining the services. These are categorised under five slabs, namely, 0%, 5%, 12%, 18% and 28%, which will be levied accordingly.

These enhanced tax rates under the GST regime often influence the working capital. Therefore, a business owner may need to find alternative avenues like a business loan for uninterrupted financial liquidity. Companies can leverage their GST returns to avail such a GST business loan

Leading NBFCs like Bajaj Finserv offer high-value unsecured GST business loan to the applicant against evaluating his GST return files and business turnover. The financial institution also provides pre-approved offers to their existing customers to streamline the lending process. One can check their pre-approved offers by providing their name and contact details.

  1. Type of GST

GST is a destination-based tax system. Hence, it is classified under Integrated Goods and Services Tax or State and Central GST. IGST is levied on the supply of goods and services from one state to another. 

At the same time, CGST and SGST are imposed on the intra-state supply of goods and services. However, these classifications divide the tax rate but do not change the taxpayer.

  1. Applicability of reverse charge services

A taxpayer needs to be aware of the “reverse charge services.” Under the GST regime, the onus of tax liability falls on the supplier of goods or services. However, in the case of reverse charge services, it redirects the burden of GST payable to the recipient of the goods or services. 

The list of reverse charge services includes Online Information and Database Access and Retrieval Services, services provided by advocates, among others.

  1. Enrolment under GST Composition scheme

If an individual owns a small business, having an annual turnover of less than Rs. 75 lakhs are eligible for the GST Composition Scheme. This allows him to pay GST at a fixed rate of turnover. 

A supplier enrolled under GST Composition Scheme is not eligible for collecting tax. Hence, a user must verify before making a transaction whether his supplier is registered under GST Composition Scheme.

However, it is also imperative to keep in mind that certain business individuals are exempted from Composition Scheme such as supplier of services, manufacturer of tobacco or ice cream or businesses supplying goods through e-commerce portals.

Thus, this is all you need to know about GST and its calculation. Learning about its aspects that affect the calculation, coupled with using a GST calculator online, can help you compute the GST amount without any hassle and remain tax compliant.

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