Do you know how to calculate GST in India?

GST in India is still treated as “Gabbar Singh Tax”. This is because taxpayers are still finding this system difficult. Thus, I am going to explain today how one can calculate GST on goods and services with ease. There are two concepts for calculating GST.

The first one is to calculate GST on the face value of goods or services. on the other hand, you may want to arrive at GST on MRP price. In other words for eg. the total price of product A is 100 INR then how much GST is included in this amount.

Let us discuss these concepts one by one.

Formula to calculate GST on the face value of the product.

Here is the simple calculation formula to calculate GST on the basic price of the goods or services.

Description
Amount(Rs) Net Cost of Product / Service 25,000=00Less Cash Discount @5%1,250=00Sub Total23,750=00Add Freight @3%712=50 Sub Total 24,462=50CGST @ 9%2,201=63SGST @ 9% 2,201=63Total (Invoice To Customer)28,865=75

Calculate GST on M.R.P

If you purchase any item then normally you pay M.R.P (Maximum Retail price) for any product. Now you want to know what is GST amount included in this price. Here is what you have to do to arrive at the GST amount.

Suppose A sold Goods to B at an MRP 1000 on which GST is applicable at 18%. GST is calculated as Inclusive as Below.

First, find out the Taxable Value

Taxable Value = 847.45 /- ( 1000 * 118/100)

GST Amount = 152.55/- (MRP — Taxable value)

You may also use the free gst calculator in India by GST India news. It calculates GST on any number of digits. The best thing is you can use it to do reverse GST calculate on bigger digits. Here is the picture of the online calculator at GST India news.

How to use the above online calculator

Enter the initial amount on which tax to be calculated. Select the GST rate and hit the calculate button.

if you want to do reverse calculation then enter the initial amount including tax amount. Select the GST rate on the said product. Select (- GST ) option and hit calculate. This will give you the taxable value, GST amount, and the gross amount.

Is GST included in MRP

YES, GST already includes in M.R.P. Therefore No tax can be applied over MRP. GST is applied to the product’s basic value & not on the MRP.

For eg: A shopkeeper wants to sell his product for Rs 300. He has to pay let’s say 12% GST. Therefore, the MRP of the product will be Rs 336. No further tax can be applied on the above MRP.

The government has issued clear guidelines charging more than the MRP is an offense under the Legal Metrology Act. This will attract monetary penalties and jail terms to the supplier.