| Original Amount | ₹0.00 |
|---|---|
| GST Amount | ₹0.00 |
| Total Amount | ₹0.00 |
Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. It has replaced many indirect taxes in many countries.
When you need to add GST to a price:
GST Amount = Original Price × GST Rate
Total Amount = Original Price + GST Amount
When you need to extract GST from a total price:
Original Price = Total Amount ÷ (1 + GST Rate)
GST Amount = Total Amount - Original Price
Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. The GST is paid by consumers, but it is remitted to the government by the businesses selling the goods and services.
GST replaced multiple taxes with a single unified tax system, making compliance easier for businesses.
GST eliminates the cascading effect (tax on tax) that was prevalent in the previous tax regime.
GST processes are primarily online, reducing paperwork and physical interactions.
Businesses can claim credit for taxes paid on inputs used for making taxable supplies.
| Term | Definition |
|---|---|
| CGST | Central Goods and Services Tax - collected by the central government |
| SGST | State Goods and Services Tax - collected by the state government |
| IGST | Integrated Goods and Services Tax - for inter-state transactions |
| HSN Code | Harmonized System of Nomenclature - classification codes for goods |
| Input Tax Credit | Credit for tax paid on purchases that can be used to offset output tax liability |
If a product costs ₹1,000 (without GST) and the GST rate is 18%:
GST Amount = ₹1,000 × 18% = ₹180
Total Amount = ₹1,000 + ₹180 = ₹1,180
If a product costs ₹1,180 (including GST at 18%):
Original Price = ₹1,180 ÷ (1 + 18%) = ₹1,180 ÷ 1.18 = ₹1,000
GST Amount = ₹1,180 - ₹1,000 = ₹180
Understanding GST calculations is crucial for businesses to correctly price their products and services, as well as for consumers to verify that they're being charged the correct amount of tax.
GST exclusive means the GST amount needs to be added to the price, while GST inclusive means the GST amount is already included in the price.
Divide the GST-inclusive price by (1 + GST rate). For example, if the GST-inclusive price is ₹1,180 with a GST rate of 18%, the GST-exclusive amount is ₹1,180 ÷ 1.18 = ₹1,000.
No, different products and services can be subject to different GST rates depending on the category they fall under. Common GST rates include 0%, 5%, 12%, 18%, and 28%.
No, GST rates and implementation vary from country to country. Some countries use the term "Value Added Tax" (VAT) instead of GST.
GST rates are typically set by the government and can change based on economic policies. However, major changes are not frequent and are usually announced in advance.
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