GSTLegal Advice

How To Calculate GST Using The GST Formula?

Want to know about how to calculate GST using the GST formula? Then you are at the right place as you will get the information here

The Goods and Services Tax (GST) rate is expressed as a percentage, and a GST calculator can help you determine either the net or gross price of your product using that percentage. It is simple to use; all you need to do is input the values you already have (for instance, the gross price and the rate of GST) to get the desired results. Before moving to the GST formula, we should first understand what GST is: The Goods and Services Tax (GST) is known to be the indirect tax that has gradually replaced many other indirect taxes in India. On March 29, 2017, the Goods and Services Tax Act got approved by the Parliament after being debated for several days. The Goods and Services Tax Law in India is a thorough, multi-stage, destination-based tax assessed on every value addition. The Act was enacted on July 1, 2017, and is a destination-based tax. To put it more plainly, the Goods and Service Tax, or GST for short, is a form of indirect tax imposed on the supply of services and goods. 

What Are The Three Different Kinds Of GST That The Government Collects?

At this time, there are three different types of GST.

  • CGST stands for Central GST; it applies to sales made within the state, and its revenue goes to the Central Government.
  • SGST stands for state GST; it applies to sales made within the state, and its revenue goes to the state government.
  • Integrated Goods and Services Tax (IGST): This tax applies to sales made outside of the state and is paid to the central government

For instance, if you sell something within the state, the GST you collect will be split equally between the SGST and the CGST (50% each). However, if you sell an item outside of a state, the entire amount you receive will be considered IGST and paid to the central government.

After going over the fundamentals of the Goods and Services Tax (GST), we can discuss how the GST is processed using Tally, including its accounting and calculation processes.

The Benefits of Utilising a GST Calculator

A GST calculator can help differentiate between the various tax brackets, which include CGST, SGST, and IGST. You will be able to determine which tax bracket your transaction will be placed in with the assistance of a GST calculator, as well as the total amount of tax that will be imposed on the goods and services sold and bought. When calculating the total cost of goods and services saves not only time but also decreases the likelihood of an error being made by a human.

What Exactly Does GST Calculator Mean?

After a couple of years of the Goods and Services Tax (GST), most businesses have become familiar with the basic information they need to have on hand regarding their products and services. The report consists of nothing more than the GST rates, HSN codes, and SAC codes, among other things, which will assist them in calculating GST more quickly, preparing invoices that comply with GST more quickly, and therefore conducting business more quickly.

On the other hand, there are many circumstances in which a businessperson might be presented with a sum that does not include GST or an aggregate that does include GST. 

To make quick decisions regarding sales and purchases in today’s fast-paced business world, one needs to know the fastest method for determining prices that do not include GST and fees that do include GST. In these situations, a Goods and Services Tax (GST) calculator has proven helpful in most countries; India will be no different. 

Anyone familiar with the appropriate formula can create a GST tax calculator in excel and keep it on hand for convenient use. However, becoming familiar with the GST rates is the first step toward maintaining and using a GST calculator. This is because the rates affect the calculations that the calculator produces.

Formulae for GST calculation

The calculation of GST can be explained with a straightforward example: If a product or service is sold for Rs. 1,000 and the GST rate of application is 18%, then the net price will be calculated as Rs. 1,000 plus (1,000 x (18/100)) which will equal Rs. 1,000 plus 180, which will equal Rs. 1,180.

Make sure you are familiar with how to calculate GST and that you are using the appropriate GST tax calculator here.

How Do You Calculate GST Utilising the GST Formula

The regime for collecting indirect taxes has recently been simplified, which has made the calculation of applicable taxes much less complicated. It is now possible to calculate the different Goods and Services Tax (GST) rates applicable on the various goods or services, depending on the nature of the transaction, which can either be interstate or intrastate.

Intra-state GST Tax Calculator

In the case of transactions that take place within the same state, the GST can get calculated as mentioned below:

  • CGST equals the GST applicable rate divided by two 
  • UTGST/SGST = GST applicable rate of GST 
  • The GST applicable rate is equal to the sum of the CGST, SGST, and UTGST taxes.

Tax Calculator Of Inter-State GST

In the case of dealings between states, the Goods and Services Tax (GST) can be calculated as mentioned below::

IGST stands for the applicable rate of GST.


To ensure that the correct amount of tax is determined, it is necessary to add the GST to the rate of GST currently in effect. A calculator for calculating the GST credit will operate according to the same principles.

As a result, the following formula can be derived:

Net price is equal to the original cost plus the GST amount, which is calculated by multiplying the actual cost by the percentage of the GST rate. Calculate your GST using GST Calculator

Conclusion: Use the calculation of GST with the GST formula. To know more about GST and how to calculate it, get in touch with the professionals at Vakilsearch who can be of good help here.

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