GST Calculator
Calculating the Goods and Services Tax (GST) accurately is extremely important as it helps you to create an error free invoice. For example, if a product is priced at ₹20,000 and it attracts a GST rate of 18%, you should know the tax applicable on the product and the final amount post-taxation. Using an online GST Calculator can help simplify these calculations.
Using the GST calculator is very easy. You only need to enter details like the cost of the product, the applicable GST rate, the transaction type, etc., to get an accurate tax breakup in seconds. As these calculations happen multiple times daily for any business, getting them wrong leads to compliance issues, invoice rejections, and input tax credit mismatches.
GST Calculator
Total Amount
Post-GST Amount
What is the Goods and Services Tax (GST) and How Does it Work?
The GST (Goods and Services Tax) replaced multiple indirect taxes in India in July 2017. It helped create a unified tax system across states. The goal was simple: eliminate multiple taxes and bring transparency to the system of indirect taxation.
GST applies at every stage of the supply chain. However, businesses pay tax on the value addition and claim credit for the GST already paid. The final cost is borne by the end consumer. This tax is collected at the point of consumption of the product or service.
GST is a part of the complex system of the taxation structure in India. To know more about the different types of taxes applicable on salaried individuals and businesses, along with the agencies administering the taxation system in the country, you can read Finnable’s blog on the taxation system in India.
What is a GST Calculator and How to Use it?
GST calculator is a free online tool that calculates the exact taxation amount based on your product’s value and the applicable GST rate.
This calculator is very helpful to calculate the correct taxation amount on your products and services and prevent errors or miscalculations. If you run your own business, you would understand how an invoice mismatch can create multiple issues.
To avoid that, you can calculate the taxation on your GST within seconds using Finnable’s online calculator. You need just these inputs:
- Taxable Amount: Base price before GST
- GST Rate: 0%, 5%, 12%, 18%, or 28%
- Calculation Type: GST exclusive or GST inclusive
- Transaction Type: Intra-state or inter-state
Step-by-Step Process to Calculate GST
- Enter the cost of the product/service
- Select the applicable GST rate
- Choose the GST exclusive or inclusive option
- Select whether it is an inter-state or intra-state transaction
- Click calculate to generate the final output
Output shows the GST amount and final invoice value. You can use Finnable’s GST calculator to save time and prevents mistakes.
How to Calculate GST: The Formula
Knowing how to calculate GST manually helps to validate the calculator.
GST Exclusive (Adding tax)
GST Amount = Base Price × (GST Rate ÷ 100)
Final Price = Base Price + GST
Example: ₹25,000 at 18%
GST = ₹4,500
Final = ₹29,500
GST Inclusive (Extracting tax)
Base Price = Total ÷ (1 + GST Rate/100)
GST = Total - Base Price
Example: ₹29,500 inclusive
Base = ₹25,000
GST = ₹4,500
You can use Finnable’s online GST calculator to perform all these steps automatically in seconds.
What are the Different Types of GST?
The three types of GST are CGST (Central GST), SGST (State GST), and IGST (Integrated GST). It is divided based on transaction location:
- CGST: Collected by the central government when the product/service is sold within the state
- SGST: Collected by the state government when the product/service is sold within the state
- IGST: Collected by the central government when the sale of the product/service happens between two different states
Knowing about these three types of GST and where they are applicable is essential for any business. Many businesses make the mistake of applying IGST instead of CGST/SGST which may lead to invoice rejections and compliance issues as well.
Example to Understand the Calculation of CGST, SGST and IGST
Referring to the same example we used earlier in the blog, if a product is priced at ₹20,000, with a GST rate of 18%, below are different scenarios of how the tax will be calculated:
Base price: ₹20,000
GST rate: 18 percent
Tax: ₹3,600
Final price post-tax: ₹23,600
Scenario 1: Intra-state retail sale
The tax amount will be divided equally between CGST and SGST:
CGST: ₹1,800
SGST: ₹1,800
Total: ₹23,600
Scenario 2: Inter-state Retail Sale
The IGST will be applicable in this case:
IGST: ₹3,600
Total: ₹23,600
Scenario 3: Reverse Calculation of GST
You can also use the GST calculator to handle reverse calculations accurately for the purpose of accounting and reconciliation.
Total paid: ₹23,600 (inclusive of 18% GST)
Base price: ₹20,000
GST: ₹3,600
Accountants usually recommend that you should verify once with the GST calculator to understand the exact tax calculations for any transaction before generating the invoice or filing returns.
What is GSTIN?
Goods and Services Tax Identification Number, or GSTIN, is a unique 15-digit alphanumeric number that is assigned to every individual or entity registered under GST regime. It is based on the Permanent Account Number (PAN).
You can use it for various purposes like filing returns, making payments and claiming input tax credits.
Advantages of Using a GST Calculator
Some of the main benefits of using a calculator to get the taxation figures are as follows:
Accuracy in Billing
Using this calculator regularly can help you eliminate manual calculation errors, provide correct classification of the CGST, SGST and IGST. Furthermore, it will also help you prevent mismatches of the input tax credits and reduce compliance issues.
Saves Time
Manually calculating the GST for every transaction is time consuming. Additionally, there are greater chances of errors. In comparison, a GST calculator does the whole thing within seconds. This is especially useful when you are handling multiple invoices daily.
Gross Price Estimation
You can use this calculator to estimate the gross price (including taxes) for your products/services, thereby helping you get a better idea of the tax component for each transaction.
Better Compliance
If you use the online calculators for correct invoice values helps in consistent reporting and smooth filing of GST returns. Filing correct returns will help you avoid compliance issues as well.
GST Calculator for Different Users
Businesses
Manufacturers, traders, and service providers can use this calculator to compute their output tax, verify input credit, and calculate the net liability accurately.
Consumers
Consumers use it to verify bills, compare inclusive prices, and ensure that the correct GST rates are applied - especially in restaurants and e-commerce.
Exports and Imports
- Exports: Zero-rated (0% GST)
- Imports: IGST paid at customs, claimable as ITC
The GST calculator supports zero-rated and IGST calculations seamlessly.
Frequently Asked Questions
You should use a calculator to compute the GST values as it ensures accurate tax computation, prevents billing errors, and helps maintain GST compliance without manual effort.
You can calculate the GST on the MRP of any product by using the reverse calculation method. First, you identify the GST rate applicable for the product. Then you apply the following formula: GST Amount = MRP - [MRP*100/(GST Rate+100)]. Using this method will help you get the tax component for a particular product.
You calculate the GST on the transaction value of a good or service. It is the actual price for a product that is either already paid or will be payable on supply of the product. It includes all the expenses that a supplier has to bear, including packaging charges, delivery costs, etc.
The central government has subsumed several taxes under the GST like the value added tax (VAT), service tax, central sales tax, etc.
At present there are 5 major tax slabs under the GST: 0%, 5%, 12%, 18% and 28%. Apart from this, there are some other items like gold and jewellery and rough diamonds that have special GST rates. Additionally, petroleum products like petrol, diesel, crude oil, aviation turbine fuels, etc, are outside the purview of this tax.
Credit Score
Check Your Credit Score
Get instant access to your credit score at no cost. Stay informed and loan-ready.
1.5M+ people
checked their credit Score
