What is GST?
financeDefinition
GST (Goods and Services Tax) is a unified indirect tax levied on the supply of goods and services in India, replacing multiple taxes like VAT, service tax, and excise duty. India operates a dual GST structure: CGST (Central) and SGST (State) for intra-state transactions, and IGST (Integrated) for inter-state transactions.
Detailed Explanation
GST was introduced on July 1, 2017, as 'One Nation, One Tax'. Before GST, businesses had to comply with multiple state and central taxes, leading to cascading taxation (tax on tax). GST eliminated this by allowing input tax credit — businesses can deduct the GST they paid on purchases from the GST they collect on sales.
India has four primary GST rates: 5% (essential goods, economy services), 12% (processed foods, business class travel), 18% (most services, electronic goods), and 28% (luxury goods, automobiles, tobacco). Some items like fresh vegetables, milk, and books are exempt from GST.
For businesses, the key formula is: GST Amount = Original Price × GST Rate / 100. The final selling price = Original Price + GST Amount. Use ToolsDock's GST Calculator to add or remove GST from any amount instantly.
🧾 GST Calculator
Add/remove GST from amounts