How is GST Calculated?
GST (Goods and Services Tax) can be easily calculated by multiplying the taxable amount with the applicable GST rate. If Central GST (CGST) and State GST (SGST) or Union Territory GST (UTGST) are applied, each of these will represent half of the total GST amount. The formula for GST calculation is as follows:
If you have an amount that already includes GST, you can determine the pre-GST taxable amount using this formula:
For example, if the total amount including GST is Rs. 525 and the GST rate is 5%, the calculation would be:
What is the GST Percentage in India?
In India, GST rates vary depending on the type of goods and services. The rates are categorized as:
- 0% for essential items like milk, wheat flour, etc.
- 0.25% for rough diamonds.
- 3% for precious metals like gold and silver.
- 5%, 12%, 18%, and 28% for most goods and services.
Most goods fall under the 5%, 12%, and 18% categories, while many services are taxed at 18%. The 28% GST rate is applied to luxury goods like cement, cars, and tobacco. Additionally, a Cess is levied on specific items like pan masala and certain types of cars and tobacco products.
How to Calculate GST in Case of Reverse Charge?
In the case of reverse charge, where the recipient is responsible for paying GST instead of the supplier, the GST calculation remains the same. For instance, if you purchase goods worth Rs. 5,000 and are required to pay GST under the reverse charge mechanism at 18%, the GST payable would be:
If both CGST and SGST are applicable, then each would be half of the total GST, meaning Rs. 450 for CGST and Rs. 450 for SGST.