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What is GST?

The full form of GST is "Goods and Services Tax". GST is a comprehensive indirect tax introduced in India on 1st July 2017, replacing the previous multiple indirect taxes such as excise duty, service tax, VAT, and others.

Calculating GST

The formula for calculating GST can be expressed as follows:

GST = Taxable Value x (Applicable Tax Rate / 100)

Here are the key components involved in the formula:

  • Taxable Value: This is the value of the goods or services on which the GST is calculated. It excludes any other taxes or charges. It is the base amount on which GST is applied.
  • Applicable Tax Rate: This is the percentage rate at which GST is levied on the taxable value. GST rates can vary for different goods and services. In some countries, there may be multiple GST rates (e.g., standard rate, reduced rate, zero rate).

Now, let's consider an example:

Suppose you have a product with a taxable value of $100, and the applicable GST rate is 10%. To calculate the GST:

GST = ₹100 × (10 / 100)

GST = ₹100 × 0.1

GST = ₹10

Therefore, the GST for the given product would be ₹10.

In many cases, the total amount paid by the consumer (including GST) is referred to as the "Invoice Value" or "Total Amount," and it is calculated as the sum of the taxable value and the GST:

Invoice Value = Taxable Value + GST

This formula helps businesses and consumers understand the breakdown of the total amount paid, including both the base value and the applicable tax.

GST Registration Requirements

Key Criteria for GST Registration in India:
Turnover Threshold:

  • Mandatory: Businesses making taxable materials exceeding Rs. 20 lakhs in a economic year (Rs. forty lakhs for sure categories) want to sign up for GST.
  • Inter-kingdom supply: Any business, irrespective of turnover, making inter-kingdom materials have to sign up.
Other eligibility criteria:
  • Casual suppliers (occasional sellers) or the ones providing exempt items or offerings commonly don`t want to register.
  • Individuals making materials totally beneathneath the opposite fee mechanism won't want to register.
  • Persons sporting on particular professions like doctors, lawyers, chartered accountants can choose composition scheme, which exempts them from registration if their turnover is under Rs. 1.five crores.
Compliance Aspects of GST Registration:
  • Filing GST returns: Regular submitting of correct returns is vital for compliance. This consists of GSTR-1 (income details), GSTR-3B (monthly/quarterly go back), and different go back bureaucracy as applicable.
  • Payment of GST: Timely fee of taxes due on sale of goods/offerings is mandatory. Late bills appeal to hobby and penalty.
  • Maintaining right records: Businesses ought to preserve right books of debts and invoices to confirm their transactions for tax purposes.
  • Other compliances: Specific compliances like e-manner invoice technology for motion of goods, opposite rate mechanism for sure transactions, and submitting of annual go back ought to be adhered to.
Additional considerations:
  • The unique necessities and compliances might also additionally range relying at the form of enterprise and location.
  • Seeking expert steerage from a tax consultant is usually recommended for making sure clean GST registration and compliance.
  • Remember, complying with GST guidelines is important for groups to keep away from felony issues and perform easily withinside the Indian market.

Common GST Rates in India

GST Rate (%)Categories of Goods and Services
0%- Basic food items like cereals, milk, fruits, and vegetables
- Healthcare services and education
- Unprocessed agricultural products
5%- Processed food items
- Economy class air travel
- Essential items such as medicines and healthcare services
- Transport services for railways and roadways
12%- Processed food items
- Restaurants (non-air-conditioned)
18%- Goods like capital goods and industrial intermediaries
- Restaurants (air-conditioned)
28%- Luxury items and services like high-end cars and hotels

- Some items, like alcohol for human consumption and petroleum products, were initially kept out of the purview of GST and subject to separate state taxes.
- GST rates on certain items could be subject to change due to government policies and revisions.

How to Account for GST

Record-Keeping: Section 35 of the GST Act and draft record rules released in April 2017 outline record-keeping requirements. Each registered person is mandated to maintain accurate accounts, including details on production, inward and outward supply, stock of goods, input tax credit, output tax payable and paid, and any other necessary particulars. These records must be kept at each registered place of business under GST.

GST Filing Steps on the Official Portal (India -

  1. Registration: Register on the GST portal using valid credentials.
  2. Login: Log in to the portal with your username and password.
  3. Dashboard: Access the dashboard for GST-related options.
  4. Select Form: Choose the relevant GST return form (e.g., GSTR-1, GSTR-3B).
  5. Enter Details: Fill in required details like turnover and input tax credit.
  6. Verify and Submit: Double-check information and submit the return.
  7. Payment (if applicable): Make tax payments using available modes.
  8. Download Acknowledgment: Download the acknowledgment receipt.
  9. Track Status: Monitor the return status on the portal.

Benefits of the GST System

For Businesses:

  • Simplified Tax Structure: GST replaces multiple taxes with a unified system, simplifying compliance.
  • Input Tax Credit (ITC): Businesses can offset taxes paid on inputs, reducing overall tax costs.
  • Elimination of Cascading Effect: Taxes are applied only on value addition, eliminating the cascading effect.
  • Broader Tax Base: GST widens the tax base, reducing the scope for tax evasion.
  • Easier Interstate Transactions: Interstate transactions are simplified with Integrated GST (IGST).
  • Unified Market: GST creates a unified national market, promoting seamless trade.

For Consumers:

  • Lower Overall Tax Burden: GST reduces the overall tax burden by eliminating cascading effects.
  • Price Transparency: Final prices include all taxes, providing transparency to consumers.
  • Elimination of Hidden Taxes: GST removes hidden taxes, ensuring transparency in cost.
  • Easier Return Filing: Simplified tax structure may lead to cost savings for businesses, benefiting consumers.
  • Wider Availability of Goods and Services: Removal of interstate barriers provides consumers access to a wider range of products.
  • Improved Logistics and Supply Chain Efficiency: GST streamlines the flow of goods, reducing transit times and costs.

In summary, GST benefits businesses by simplifying taxes and promoting efficiency, while consumers experience reduced tax burden, transparent pricing, and improved access to goods and services.

Resources for GST Assistance

For official forms, guides, and information, please visit the official GST government portals:


What is GST?
GST (Goods and Services Tax) is a unified oblique tax levied at the deliver of products and offerings throughout India. Introduced on July 1, 2017, it changed a couple of cascading taxes with a unmarried complete tax structure. GST goals to streamline the taxation device with the aid of using disposing of tax obstacles among states and unifying the tax prices for diverse items and offerings. It operates on a twin model, with each the critical and nation governments levying GST on transactions. GST enables ease of doing business, promotes transparency, reduces tax evasion, and fosters financial boom with the aid of using growing a unmarried, unified marketplace throughout the country.

Why GST is so important?
GST is essential as it simplifies India`s tax system, making it extra obvious and efficient. It replaces a couple of oblique taxes with a unmarried tax, getting rid of cascading outcomes and lowering compliance charges for corporations. Additionally, GST fosters a unified marketplace via way of means of harmonizing tax prices throughout states, selling interstate trade. It complements tax compliance, boosts sales collection, and contributes to India's financial improvement via way of means of making sure a stage gambling discipline for corporations and inspiring investment.

What are the four types of GST?

  • Central Goods and Services Tax (CGST): Collected with the aid of using the Central Government on intra-country supplies
  • State Goods and Services Tax (SGST): Collected with the aid of using State Governments on intra-country supplies.
  • Integrated Goods and Services Tax (IGST): Collected with the aid of using the Central Government on inter-country supplies.
  • Union Territory Goods and Services Tax (UTGST): Collected with the aid of using Union Territory Governments on intra-UT supplies
  • .
Who introduced GST?

The accurate solution is Arun Jaitley. Arun Jaitley delivered the GST Bill withinside the Lok Sabha, in February 2015. GST is carried out in India from 1 July 2017. Goods and Services Tax (GST) is a form of oblique tax that changed into delivered withinside the charter via way of means of the a hundred and first charter change act, 2016.

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