GST Calculator

Free online GST Calculator. Use this tool to calculate the Goods and Services Tax quickly and easily. You can calculate both GST Inclusive and Exclusive using this tool.. GST, or Goods and Services Tax, is an indirect tax imposed on the supply of goods and services. It is a multi-stage, destination-oriented tax imposed on every value addition, replacing multiple indirect taxes, including VAT, excise duty, service taxes, etc.

GST calculation formula:

Meaning and objective of GST

GST definition states that it is a tax that has replaced multiple indirect taxes, like – VAT, service taxes, excise, etc., in India. Notably, gaining an insight into the objectives of this tax regime helps to understand GST meaning better.
For instance, the primary objectives of the GST service tax include:

• Elimination of the cascading tax effect: Under the GST bill, taxes are levied only on the net value-added portion, which eliminates the tax-on-tax regime and, in turn, lowers the cost of goods.
• The subsumption of all indirect taxes: Except for a few, indirect taxes under the state and central government are subsumed into goods and services tax.
• Increase the tax to GDP ratio and revenue surplus: A high tax to GDP ratio indicates higher tax collections, a sign of a strong economic system. A wider tax base and increased tax compliance are more likely to result in higher revenue for the government through GST services.
• Decrease corruption level and tax evasion: The GST bill aims to bring transparency to the tax system resulting in fewer instances of a false input tax credit.
• Increase tax compliance: GST online aims to increase tax compliance, especially in small and unorganised businesses, by simplifying the GST platform registration and returns filing process.
• Increase in overall productivity and efficiency: The Goods and Services Tax in India aims to remove constraints regarding logistics and the lengthy claim process of an input tax credit. Also, by subsuming the entry tax, the overall productivity of enterprises is expected to increase.

Advantages of GST

The introduction of GST is touted as one of the biggest tax reforms in India. To know more about the impacts of GST, it is imperative to learn more about its advantages and disadvantages.

In this regard, the most prominent advantages of GST include:

• Removal of the cascading effect of tax: The implementation of GST has brought indirect taxes under one umbrella, successfully eliminating the cascading tax effect and lowering the number of compliances one must consider. For example, previously, service tax and VAT had their respective returns and compliance, but with the introduction of GST, entities only have to file one return. This, in turn, simplifies the process of inputting tax credit claims.
• A uniform tax structure: GST has brought the entire country under one tax regime; it facilitates uniformity in processes, laws, and tax rates across India.
• Simplified GST online process: All goods and services tax processes can be initiated online, including registration and GSTR filing. This has simplified the process significantly and made it possible for start-ups to get registered with GST services without hassle in one place.
• Regulation of the unorganised sector: The GST bill effectively streamlines the processes related to online compliance, payments, and claim processes. Further, it helps the unorganised sector, bringing them directly under the regulation of goods and service tax norms.
• GST extends the composition scheme for all small businesses: Small businesses with an annual turnover between Rs. 20 lakh and Rs. 75 lakh can become beneficiaries of GST’s composition scheme. The said scheme allows businesses to reduce their taxes.

Besides these, the GST bill has replaced 17 indirect taxes with one uniform tax. Resultantly, it has lowered the cost of goods and boosted demand for them, bringing in more revenue for both the centre and state governments.

Types of GST

There are four different types of GST which are as follows:

• State Goods and Services Tax (SGST) - The state government charges SGST on intra-state goods and services transactions. Subsequently, the revenue is collected by the state where the transactions in question were carried out.
• Central Goods and Services Tax (CGST) - The central government charges CGST on the intra-state transaction of goods and services. The concerned body is also responsible for collecting the revenue generated through this tax.
• Integrated Goods and Services Tax (IGST) - This GST tax is charged on inter-state transactions of goods and services and applied on imports and exports. Note that both Centre and State share the revenue collected through IGST as per the GST bill.
  The state goods and service tax portion of this tax is collected by the state where goods and services in question were consumed.
• Union Territory Goods and Services Tax (UGST) - This GST tax is levied by Union Territories and charged on all transactions carried out in any UT in India. It is similar in terms of payment rules on the GST platform and distribution.