Goods and Services Tax (GST) is calculated on the value of the goods or services provided. The GST calculation is based on the concept of value addition at each stage of the supply chain. There are three components of GST: Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), and Integrated Goods and Services Tax (IGST). The applicable rates for these components may vary depending on the type of goods or services.

Here’s a basic formula for GST calculation:

GSTAmount=OriginalCost×(GSTRate100)

TotalCost=OriginalCost+GSTAmount

EXAMPLE :- let’s say you have a product with an original cost of ₹1,000, and the GST rate is 18%:

GSTAmount=₹1,000×(18100)

TotalCost=₹1,000+₹180=₹1,180

Now, let’s break down the components:

• CGST: ₹90 (9% of the original cost)
• SGST: ₹90 (9% of the original cost)

The total GST is ₹180, which is distributed as ₹90 for CGST and ₹90 for SGST.

Alternatively, if the supply involves an interstate transaction, IGST is applicable. In this case, IGST is calculated using the same formula, but the entire amount goes to the central government.

IGSTAmount=OriginalCost×(IGSTRate100)

TotalCost=OriginalCost+IGSTAmount

It’s important to note that GST rates can vary for different categories of goods and services. Additionally, certain goods and services may be exempted or attract a nil GST rate.

Always check the latest GST rates and rules, as they may be subject to changes by the GST Council.