GST stands for Goods and Services Tax. It is a consumption tax levied on the supply of goods and services at each stage of the production and distribution chain. GST is designed to replace a complex system of multiple indirect taxes that were previously in place. The tax is collected on value-added goods and services at each stage of the supply chain, with a provision for businesses to claim the input tax credit for the GST they have paid on their purchases.
A GST (Goods and Services Tax) calculator is a tool used to quickly and accurately determine the Goods and Services Tax amount on a given net price. It simplifies the process of calculating the GST by automating the computation based on user inputs.
This tool is particularly useful for businesses, consumers, and tax professionals who need to quickly determine the GST on various transactions. It helps ensure accuracy in GST calculations and facilitates adherence to tax regulations.
When GST is not included:
GST Amount = (Value of supply x GST %) /100
Price to be charged = Value of supply + GST Amount
When GST is included in the value of supply:
GST Amount = Value of supply – [Value of supply x{100/ (100+GST %)}]
Example 1: GST Excluded
Suppose you have a product with a net price (value of supply) of ₹500, and the GST rate is 5%.
Calculate the GST Amount:
GST Amount = (500 x 5 %) /100 = ₹25
Calculate the Total Amount (Price to be charged):
Total Amount=₹500+₹25=₹525
So, if GST is excluded, the final price to be charged is ₹525.
Example 2: GST Included
Now, let's consider a scenario where the GST is already included in the value of supply.
Suppose you have a product with a total price(value of supply) of ₹525, and the GST rate is 5%.
GST Amount = 525 – [525 x {100/ (100+5 %)}]
GST Amount=₹525−₹500=₹25
So, if GST is included, the GST amount is ₹25, and the original value of supply was ₹500.
