Table of Content
What is GST
Full form of GST is ‘Goods and Services Tax’ and it was implemented in India in 2017. As the name suggests it is an indirect tax on goods and services supplied by a company to its B2B/B2C customer. GST is collected at the point of consumption and not at the point of origin unlike other taxes. Almost every product or service supplied within the country comes under the purview of GST, however there is a list of exempted goods/service on which GST is not applicable. To get the full list of goods or service which comes under GST please visit this link
Evolution of GST in India
The idea of a Goods and Services Tax (GST) for India was first mooted sixteen years back, during the Prime Ministership of Shri Atal Bihari Vajpayee. Thereafter, on 28th February, 2006, the then Union Finance Minister in his Budget for 2006-07 proposed that GST would be introduced from 1st April, 2010. The Empowered Committee of State Finance Ministers (EC), which had formulated the design of State VAT was requested to come up with a roadmap and structure for the GST. Joint Working Groups of officials having representatives of the States as well as the Centre were set up to examine various aspects of the GST and draw up reports specifically on exemptions and thresholds, taxation of services and taxation of inter-State supplies. Based on discussions within and between it and the Central Government, the EC released its First Discussion Paper (FDP) on GST in November, 2009. The FDP spelled out the features of the proposed GST and has formed the basis for the present GST laws and rules.
In March 2011, Constitution (115th Amendment) Bill, 2011 was introduced in the Lok Sabha to enable levy of GST. However, due to lack of political consensus, the Bill lapsed after the dissolution of 15th Lok Sabha in August 2013.
On 19th December, 2014, The Constitution (122nd Amendment) Bill 2014 was introduced in the Lok Sabha and was passed by Lok Sabha in May 2015. The Bill was taken up in Rajya Sabha and was referred to the Joint Committee of the Rajya Sabha and the Lok Sabha on 14th May, 2015. The Select Committee submitted its report on 22nd July, 2015. Thereafter, the Constitutional Amendment Bill was moved on 1st August 2016 based on political consensus. The Bill was passed by the Rajya Sabha on 3rd August 2016 and by the Lok Sabha on 8th August 2016. After ratification by required number of State legislatures and assent of the President, the Constitutional amendment was notified as Constitution (101st Amendment) Act 2016 on 8th September, 2016. The Constitutional amendment paved way for introduction of Goods and Services Tax in India.
After GST Council approved the Central Goods and Services Tax Bill 2017 (The CGST Bill), the Integrated Goods and Services Tax Bill 2017 (The IGST Bill), the Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill), the Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill), these Bills were passed by the Lok Sabha on 29th March, 2017. The Rajya Sabha passed these Bills on 6th April, 2017 and were then enacted as Acts on 12th April, 2017. T 2015. 6 on 08.09.2016
Thereafter, State Legislatures of different States have passed respective State Goods and Services Tax Bills. After the enactment of various GST laws, GST was launched with effect from 1st July 2017 by Sh.Narendra Modi, Hon'ble Prime Minister of India in the presence of Sh.Pranab Mukherjee, the then President of India in a mid-night function at the Central Hall of Parliament of India.
Objective of introducing GST
TAX Slabs under GST
Every product/service supplied which comes under GST purview has one of the tax slab applicable on them - 3%, 5%, 12%, 18%, 28%. Most of the services fall under 18% slab but it’s not a thumbrule. To check your product/service fall in which slab you have to search for it here.
Different tax components of GST
There are 3 different components of GST which can be classified as under
What is a GST Calculator
Gst calculator is a very handy ready-to-use tool/calculator for a trader/manufacturer/wholesaler/retailer/startup or any other businessman or accountant who wants to compute the GST payable for a month or quarter
What’s the use of GST Calculator
The simplified GST calculator helps you determine the gross or net product price on percentage-based GST rates. It helps give the bifurcation of the rate between CGST and SGST or calculate IGST accurately. The GST calculator saves time and reduces the chances of human error while computing the total cost of goods and services.
Formulae/Cheat Sheet for GST Calculation
If you are a student or an enthusiast who wants to know how does a GST calculator finds out the GST data then here’s the formula which is used in GST calculation:
GST Amount =
(Value of supply x GST%)/100
Price to be charged =
Value of supply + GST Amount
GST Amount =
Value of supply – [Value of supply x {100/(100+GST%)}]
These formulas act as a handy cheat sheet for GST calculation. You can also download it in PDF format here
Examples to understand GST Calculation
Given below is a simple illustration for GST calculation:
|
Particulars |
Rate(%) |
Amount |
|
Invoice value |
18% |
100,000 |
|
GST |
18,000 |
|
|
Price to be charged on the Invoice |
118,000 |
Calculation of GST by Manufacturers:
|
Particulars |
Rate(%) |
Amount under GST |
|
Cost of the product |
– |
200,000 |
|
Profit |
10.00% |
20,000 |
|
Total |
– |
220,000 |
|
CGST |
9% |
19,800 |
|
SGST |
9% |
19,800 |
|
Final Invoice to the wholesaler |
– |
259,600 |
There is a cost reduction for manufacturers, who pass this benefit along the supply chain to the wholesalers, retailers and end-consumers.
Calculation of GST by Wholesalers & Retailers:
|
Particulars |
Rate(%) |
Amount under GST |
|
Cost of the product |
– |
259,600 |
|
Profit |
10% |
25,960 |
|
Total |
– |
285,560 |
|
CGST (Rs. 285560 x 9%) – (Credit on CGST paid above Rs.19,800) |
9% |
5,900.4 |
|
SGST (Rs. 285560 x 9%) – (Credit on SGST paid above Rs.19,800) |
9% |
5,900.4 |
|
Final Invoice to the end-consumer |
– |
336,960.8 |
The cost of the product falls due under the GST regime and the end-consumer has to pay a lesser price for the goods at the same profit margin earned by wholesalers and retailers.
The tool works offline for you and automatically calculates the net liability in cash after considering the balances in electronic credit ledger for each tax head-IGST, CGST and SGST/UTGST.
Offline Tools to Calculate GST
Official GST portal of govt. Of India has listed many offline tools on their website using which you can prepare your GST report. All the tools are in the form of spreadsheet which can be used even when the internet is not connected to your device. You just need wifi connection to download these tools. Download GST Offline Tools
FAQ of GST Calculator
What is the GST calculator?
GST calculator is used to calculating the GST payable for a specific period.
Who can use the GST calculator?
The GST calculator can be used by anyone who is supplying or buyin any product or a service. He can be a buyer, retailer manufacturer, wholesaler, distributor, startup, trader, service provider etc.
How can a buyer use the GST calculator?
Enter the net price before GST and then enter the rate of GST. It will calculate the total cost of production, CGST, SGST, and total tax.
How can a manufacturer/wholesaler/distributor/retailer use the GST calculator?
Enter the cost of production/cost of goods, profit ratio percentage, and rate of GST. It will show the total cost of production, CGST, SGST, and total tax.
What are the benefits of the GST calculator?
The GST calculator saves time and reduces the chances of human error while computing the total cost of goods and services and the tax amount.