What is a GST?
GST is a tax system that is centralized and was implemented in the country in the year 2017. The parliament passed it on the 29th March 2017. Finally, in India, it was imposed in the Indian market on the first of July in the year 2017. The registration of the GST had developed from the idea of VAT that is Value Added Tax. This form of tax is added at each phase of the business. It is a tax that is indirect and is seen as a replacement of different forms of taxes in the structure of the business. The excise tax calculator has a few factors that need to be given a thought. A GST number is mentioned to an organization/business once they get enrolled and this helps the government in keeping track of the tax-paying businesses.
How is the process of GST Calculation carried out?
The VAT calculation occurs in a very simple manner however under specific conditions. There is a portion of the rules that should be remembered during the process of taxation. The GST is determined by the turnover of a business or company. To obtain the turnover of a business, the value of taxable supplies in total, the exportation of products, exempt supplies, and supplies that are inter-state are considered. Then, at that point, they need to find the expense of the inward supplies’ value, the worth of supplies liable to taxation under reverse charge, and the worth of supplies that are not taxable.
After the calculation of turnover of a company is done, the calculation of exercise duty is carried out. For the calculation of the indirect tax, the company has to follow the percentage imposed in the state they work in and pay according to it.
The service tax is the cost of the goods that are originally multiplied by the percentage of Goods and Services Tax and finally, it is divided by 100 to obtain the final amount of tax that is to be paid.
In this manner: (Cost that is original X Percentage of GST)/100 = Amount of GST.
How do business structures decide the GST percentage?
Many businesses have been built and each of them has its own rate sets that are based on the services that are offered. Following are the products and their percentage of GST:
i. Nil: Sanitary Napkins, Hulled Cereal Grains, etc.
ii. 0.25%: Stones that are cut and semi-polished.
iii. 5%: spices, sugar, oils (edible), etc.
iv. 12%: Monitor, Compute, Specs, etc.
v. 18%: Hair Oils, Soaps, etc.
vi. 28%: Refrigerator, AC, etc.
i. Nil: PMJDY account basic services, etc.
ii. 5%: Ait Travel, Services for Rental Cab, etc.
iii. 12%: Under 100 movie tickets, etc.
iv. 18%: Theatre, Outdoor catering, etc.
v. 28%: Go-Karting, Amusement Parks, etc.
Not only this but also note that GST is applicable to real estate Businesses and Gold too.