GST Calculator

In India, there are 2 types of taxes, direct and indirect. Direct taxes are levied directly on incomes and profits, and Indirect taxes are charged on selling goods and services. Indirect taxes are collected as Goods and Services (GST) Tax.

With a clear understanding of the tax, its calculation, and its implications, you can effectively assess your costs with precision. Shriram Finance's GST calculator can be a helpful tool to determine whether you should opt for inclusive or exclusive GST. It is an online calculator to calculate your tax liability for a particular transaction or for making pricing decisions.

What is GST (Goods and Services Tax)?

On 1 July 2017, the Indian government launched the Goods and Services Tax. It replaced various taxes levied by central, state and union territory governments like value-added tax and excise duty, thus driving the vision of ‘One Nation, One Tax’. When GST replaced the previously complex tax system in 2017, tax compliance was simplified.

Under the GST regime, product categories were assigned into tax slabs – 5%, 12%, 18%, and 28%. However, certain essential products for survival, such as food grains, were granted exemptions, either fully or partially.

GST slabs for different products:

Tax Components under GST

There are 4 components under GST:

1. Central Goods and Services Tax (CGST)

For any goods and services sold within India, CGST is applicable.

2. State Goods and Services Tax (SGST)

The respective governments of each state, where the goods and services are sold, collect SGST.

3. Union Territory Goods and Services Tax (UTGST)

When goods and services are sold in union territories, UTGST is applicable. The union territory government collects UTGST as directed by the Central Board of Indirect Taxes and Customs (CBIC).

4. Integrated Goods and Services Tax (IGST)

When goods and services are sold across state or national borders, IGST is incurred. IGST is collected by the central government. In the case of inter-state sales, the central government apportions the IGST amount to the respective state.

What is a GST Calculator?

A GST calculator helps you determine the final price for a product by calculating the GST based on product type, type of transaction, and product value. A GST percentage calculator can also help you decide whether to go for an inclusive GST or an exclusive GST. For the receiver of the product, a GST calculator can help you determine your GST liability from the purchase in the case of reverse GST.

How Does the GST Calculator Work?

The GST percentage calculator uses product type, original price, and the type of GST as inputs and calculates the amount of GST and the post-GST price of the product.

How to Use the Shriram GST Calculator?

Following are the steps to calculate GST online:

1. Select the type of product
2. Enter the original price
3. Choose between an inclusive GST calculator and an exclusive GST calculator
4. Click the 'Calculate' button.

How do you Calculate GST?

Suppose your business sells pens. In 2023, the applicable GST rate on pens is 18%. Assuming you are selling 100 pens worth ₹10 each, amounting to ₹1,000 in total.

If GST is charged in addition to the value of the pens, you can find the GST amount by following the exclusive GST formula.

GST amount = ₹1,000 X 18/100

= ₹180

However, if GST is charged as a part of the original value of the pens, then you can find the GST amount by following the inclusive GST formula.

GST amount = ₹1,000 X 18 / (100 + 18)

= ₹1,000 X 18 / (118)

= ₹18,000 / 118

= ₹152.54

Here are some examples of how 18% GST will be calculated for different values and GST types:

Notice how the tax amount stays lower in inclusive GST compared to exclusive GST. As mentioned earlier, the price of goods remains the same when inclusive GST is applied, but it increases with exclusive GST.

If you are a provider of goods and services in a highly competitive market, you might want to opt for inclusive GST to keep the prices down.

GST Calculation Formula

The GST calculation formula depends on whether you choose inclusive or exclusive GST, i.e. whether you want to calculate GST as a part of the price or whether you want to charge it on top of the final price.

What is the GST Inclusive Amount?

When GST is calculated as a part of the original price, it is called inclusive GST. In this case, the final pricing of the product will not change. But the sales revenue of the seller will be less than the original price since a part of it will go to the government as GST.

Inclusive GST calculation formula:

GST amount = Price X [GST rate / (100 + GST rate)]

What is the GST Exclusive Amount?

When GST is charged in addition to the original price, it is called exclusive GST. In this case, the post-GST price of the product will increase. Here, the buyer pays a higher price than the original price, the seller receives the actual price, and the government gets the GST amount.

Exclusive GST calculation formula:

GST amount = Original price X (Applicable GST rate / 100)

Benefits of Using a GST Calculator

• Eliminates human errors
• Enable you to calculate GST for different products
• Optimise your tax liabilities
• Shriram provides an easy and intuitive way to calculate GST online

Conclusion

With the introduction of GST, indirect taxation has become more transparent and easy to understand. However, due to different types of GST and different rates of GST for diverse products, it can be challenging for anyone to calculate GST on several transactions.

Various online calculators, including the GST calculator provided by Shriram Finance, make it easy to calculate GST for various transactions. Additionally, it empowers you to decide whether to maintain the price unchanged by incorporating GST within the original pricing or to add GST on top of the original price.