Goods and Services Tax

The GST calculator can help you determine the net or gross price of your product

What is GST

The GST calculator is very simple to use. It essentially assists you in determining whether a product’s net or gross price is based on a percentage-based GST (tax on goods and services) rate. It is very simple and straightforward to use; simply enter values you are familiar with (for example, net price and VAT rate) to obtain other values (in this case, gross price and tax amount). Because the tax on goods and services is identical to VAT (value-added tax), the definition of GST is… well, the same. It is applicable; governments impose it on all levels of the distribution chain for goods and services. We’ll give you an example to help you understand. When the factory sells it to a wholesaler, it includes it. When that wholesaler sells it to another retailer, he adds it, but he can recoup the original amount.

In fact, the tax added at this level applies only to the net price (the difference between a manufacturer and a wholesaler). The same rule applies to each subsequent transaction, with one exception: the end consumer cannot receive a tax refund because he is the final link in the chain. It all boils down to two things: • The amount collected by the government equals the amount paid on the previous transaction.

• The government is confident that the tax will be collected because it is levied on each subsequent transaction.

We also have multiple types of GST. In India, for example, there are four types of GST calculators:

State Goods and Services Tax (SGST);

Central Goods and Services Tax (CGST);

The IGST (Integrated Goods and Services Tax) is a tax on goods and services.

UGST (United Kingdom Goods and Services Tax (Union Territory Goods and Services Tax).

How to calculate Goods and Service Tax

It’s very simple. Simply follow these steps.

Calculate the net price (price without VAT). Let’s say it’s around € 40.

Determine the VAT rate. In our example, the percentage will be 10%. Divide it by 100 if it’s expressed as a percentage. As a result, 10/100 = 0.1.

To figure out the tax, multiply the net price by the VAT rate. 40 USD multiplied by 0.1 equals 4 EUR.

To calculate the gross price, multiply the net price by VAT (again, € 4) by the rate, and then:

Add to the price excluding VAT. € 40 plus € 4 equals € 44.

This is simply a case of calculating the percentage increase, which is what you would do in any situation involving net to gross conversion. So everything is done in this manner.