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GST Calculator
• Standard rates: 5%, 12%, 18%, 28%
• 0% on essential items (food, medicines)
• ITC available on business purchases
• Input GST can be offset against output GST
• Reverse charge: Buyer pays GST in some B2B
GST Calculation Details
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Understanding GST (Goods and Services Tax)
What is GST?
The Goods and Services Tax (GST) is a comprehensive indirect tax on the supply of goods and services. Implemented in India on July 1, 2017, GST replaced multiple taxes (VAT, excise, service tax, etc.). It's a destination-based tax, meaning the tax is paid where the goods/services are consumed, not where they're produced. GST is levied on the supply of goods and services but is input-tax-creditable for businesses.
GST Rates in India
| GST Rate | Items Covered | Examples |
|---|---|---|
| 0% GST | Essential items (Exempt) | Unpackaged food, books, newspapers, medical devices |
| 5% GST | Essential goods | Packaged food, edible oils, medicines, milk, spices, seeds |
| 12% GST | Common goods & services | Apparel, footwear, processed food, cosmetics, oil seeds |
| 18% GST | Most goods & services | Electronics, furniture, air travel, restaurants, hotels, services |
| 28% GST | Luxury & sin goods | Automobiles, tobacco, alcohol, luxury watches, aerated drinks |
CGST, SGST, IGST Explained
- CGST (Central GST): Tax component retained by Central Government. For intra-state transactions
- SGST (State GST): Tax component retained by State Government. For intra-state transactions
- IGST (Integrated GST): Single tax for inter-state/international transactions. Full amount goes to destination state
- Formula: For intra-state: GST = CGST (50%) + SGST (50%). For inter-state: GST = IGST (100%)
GST Amount = Price Ex-GST × (GST Rate / 100)
Price Including GST:
Price Inc-GST = Price Ex-GST + GST Amount
Reverse Calculation (Remove GST):
Price Ex-GST = Price Inc-GST / (1 + GST Rate / 100)
Input Tax Credit (ITC) in GST
What is Input Tax Credit?
Input Tax Credit (ITC) is the tax paid on inputs used in the supply of goods/services. A registered business can claim this as a credit against the GST liability on output supplies. This prevents cascading tax and ensures GST is effectively paid only by the final consumer, not intermediate businesses.
ITC Eligibility Conditions
- Registered Supplier: Business must be GST registered
- Supply for Business: Goods/services must be used for making taxable supplies
- Valid Invoice: Must have proper GST invoice with GSTIN details
- Payment Proof: GST paid must be supported by bank/cash records
- Filing Requirement: Return must be filed to claim ITC
- Disallowed Items: Passenger vehicles, fuel, motels, alcohol (personal use) - no ITC
ITC on Different Categories
- Eligible for ITC: Raw materials, manufacturing inputs, capital goods, office supplies, electricity
- Not Eligible: Personal consumption, motor vehicles (except specific business use), entertainment, goods for personal use
- Restricted: Partially eligible on certain items (hotels, restaurants - 50% only for specified businesses)
ITC Reversal (When Not Applicable)
- Goods supplied for free/discounted (non-taxable)
- Goods destroyed or lost (must report to GST authorities)
- Goods returned by customer (to extent of return)
- Change in business nature (if supplies become non-taxable)
GST for Different Business Types
GST for Manufacturers
- Output GST: Collect GST on sales to wholesalers/retailers
- Input GST: Claim ITC on raw materials, utilities, capital goods
- Pay: Output GST minus Input GST (can be 0 if ITC > Output GST)
- Example: Produce goods for ₹1L, collect ₹18K GST. Buy materials for ₹50K, pay ₹9K GST. Pay ₹18K - ₹9K = ₹9K GST
GST for Retailers/Wholesalers
- Output GST: Collect GST on sales to customers
- Input GST: Claim ITC on goods purchased from manufacturers/wholesalers
- Reverse Charge: When buying from unregistered suppliers, calculate and pay GST yourself
GST for Service Providers
- Place of Supply: Determined by customer's location (if different)
- B2B Services: Customer's location determines tax location (IGST/CGST+SGST)
- B2C Services: Supplier's location determines tax (CGST+SGST for intra-state)
- Reverse Charge: Some B2B services subject to reverse charge (buyer pays)
Exempt vs Non-Taxable
- Exempt Supply: No GST charged, but no ITC on inputs (health, education, financial services)
- Zero-Rated (0% GST): No GST charged, but full ITC available (exports)
- Non-Taxable: GST not applicable (specific items outside GST)
Frequently Asked Questions on GST
What's the difference between CGST and SGST?
CGST is the central portion of GST (retained by central govt), SGST is state portion (retained by state govt). For intra-state supplies, 50-50 split. For inter-state, IGST covers both.
Can I claim ITC on expenses like rent, insurance, salary?
No. ITC is only on GST paid on supplies of goods/services. Rent, salaries, insurance don't have GST component. Utilities and services purchased WITH GST are eligible.
Do I need GST registration if I earn below ₹20 Lakhs?
No, not mandatory below ₹20L turnover. However, you can opt for voluntary registration to claim ITC on purchases. Many do this even below threshold.
What is reverse charge mechanism?
In reverse charge, the buyer (instead of supplier) is liable to pay GST. Applies to specific B2B transactions, goods from unregistered suppliers, and inter-state supplies of goods by unregistered dealers.
How do I calculate GST for inter-state supplies?
Use IGST instead of CGST+SGST. IGST = Full GST rate. The entire amount goes to destination state. ITC treatment is same as intra-state.
Can I charge different GST rates on the same product?
No. GST rate is fixed per product/service category. If same item falls under multiple categories, apply rate for primary intended use. Bundled items may have mixed rates.
What happens if I claim ITC on ineligible items?
It's an audit risk. Ineligible ITC can be reversed, penalties (10%-20%) and interest (18% p.a.) imposed. Proper documentation is essential to avoid scrutiny.
Do imports have GST?
Yes. Imports are subject to IGST (integrated GST) on the assessable value. ITC is available on import GST if goods are used for taxable supplies.
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