Article
How do I calculate GST?
We come across GST on daily basis, any basic item you buy GST is levied on it. There are different rates at which GST is levied on the various goods and services. You must be thinking how you can calculate GST, well don’t worry because we will tell you how to calculate GST in some simple steps.
For calculating GST, a taxpayer is supposed to consider all the aspects and provisions like reverse charge, exempted supplies, inter-state sales along with eligible and non-eligible ITC before calculating the amount of GST payable.
It is of utmost importance to calculate the right amount, if you pay less amount, then you are liable to pay interest at the GST rate of 18% on the shortfall.
Important components of GST calculation
- Output supplies
- GST payable on reverse charge
- GST on inward supplies
- The opening balance of electronic cash ledger.
- The electronic credit ledger
Generally, the tax liability is calculated in the process of filing the GST Returns, but if you want to calculate the liability before, in order to make sure that the required money is set aside to pay the GST liability.
Details required to calculate GST are as follows: -
- Month for which the calculations are being done
- Due date of filing return for the month
- Actual date of filing the return
- Your total tax liability during the month
- Your purchases attracting Reverse Charge Mechanism
- Eligible ITC (from GSTR-2)
- Opening balance of cash ledger
- Opening balance of your credit ledger
How to calculate Output Tax Liability?
The output tax liability has to be calculated by multiplying the GST rate with the total value of supplies and advances.
For example (assuming applicable GST rate is 18%):
| Details | Amount |
| Total value of inter-state sales | 15 lakh |
| Total value of intra-state sales | 35 lakh |
| Advance Received – inter-state | 25 lakh |
| IGST | 25 lakh |
| CGST |
15 lakh * 18% = 2.70 lakh 20 lakh * 18% = 3.60 lakh Total = 6.30 lakh |
| SGST | 35 lakh * 9% = 3.15 lakh |
So, that’s how you can calculate the GST.
