Topic: Goods and Service Tax Calculation formula (Read 86 times)

Have you ever wonder how gst is calculated in India or what is the formula to arrive gst amount on any given value?.  if not I am going to drill down it here.  The first thing we should know what is the GST tax rate on the item you want to calculate the tax.

For eg. Woven fabrics of manmade textile materials comes under HSN code  5407, 5408 which attracts 5% GST ( 2.5% CGST and 2.5% SGST).

GST calculation on Basic value

Now assume the selling price of these bags is = 100/- per kg.  Also, assume that the seller is selling 50kgs.  Therefore, the total sale value comes to Rs. 5000/- .  You may read more at https://gstindianews.info/gst-calculator-simple-free-gst-calculator-india/.

Now the GST amount should be calculated as : 5000 x 5 / 100 = 250 INR.  Therefore, the GST amount payable on Rs. 5000/- is Rs. 250. if you split it up then it comes CGST = RS. 125/-; SGST = 125/-

GST calculation on M.R.P
If you have purchase any product and assume that the MRP of it is Rs. 125/- .  Now you want to know the GST amount included in this Rs. 125.  how to calculate this.   Here is the formula. 

The Formula is = MRP x 100 / 105

BASIC VALUE = 125 x 100 /105 = 119.05/-

GST AMOUNT = 5.95/-
 
In the above formula you need to write down the MRP, multiply with 100 factor always and then divide it by 100 + 5 (GST rate of your product)

This will give you the price before tax calculation.   Thus in the above case price of the product without GST  = 119.05/-.  where as the gst amount in your MRP is Rs. 5.95.