and Services Tax (GST) is an Indirect Tax (or Consumption Tax)
started on 1st
July 2017 in India on the supply of goods and services. It is a
comprehensive multistage, destination based tax: comprehensive
because it has subsumed almost all the indirect taxes except few;
multi-staged as it is imposed at every step in the production
process, but is meant to be refunded to all parties in the various
stages of production other than the final consumer and as a
destination based tax, as it is collected from point of consumption
and not point of origin like previous taxes.
and services are divided into five different tax slabs for collection
of tax - 0%, 5%, 12%, 18% and 28%. However, petroleum products,
alcoholic drinks, and electricity are not taxed under GST and instead
are taxed separately by the individual state governments. There is a
special rate of 0.25% on rough precious and semi-precious stones and
3% on gold. In addition, a cess of 22% or other rates on top of 28%
GST applies on few items like aerated drinks, luxury cars and tobacco
products. Pre-GST, the statutory tax rate for most goods was about
26.5%, Post-GST, most goods are expected to be in the 18% tax range.
There are four
types of GST:
Goods and Services Tax (CGST)
Goods and Services Tax (SGST)
Goods and Services Tax (IGST)
Territory Goods and Services Tax (UGST)
How to Calculate GST
CGST & SGST/UTGST is to be applied, then CGST and SGST both
amounts are half of the total GST amount.
= Taxable Amount x GST Rate (In Percentage)
excluding amount = GST including amount / (1+ GST rate/100).
including amount is Rs.630 and GST rate is 5%.
Excluding GST = 630 / (1+5/100) = 600