STEPS IN CALCULUTING GST
A lot of people have difficulty understanding what GST is calculated correctly. The steps below can be extremely beneficial:
Find the rate of GST TO BE TAXED on the goods
First, find out the
GST filing
slab will apply to the products and services. In order to do this, the person who is registered must:
Learn HSN code , or SAC code
If your business is involved in the supplies of goods, then it is essential to find out the meaning of is its "Harmonized system of nomenclature" (or HSN code is since this international system aids in identifying all types of international goods exchanged. And if the business provides services, it must find the "Service Accounting Codes" (SAC)code which is utilized for all services that fall provided under GST.
Locate the GST rate that will be levied.
Once you know how to find out what HSN code , or SAC code is, the following step would be to find out which tax slab is applicable to the items and services. The
GST filing online
is separated in four tax sub-segments which are 5%, 12%, 18%, and 12%, 18 percent, and 28 percent.
Determine the component of GST IN APPLICABLE
After determining the rate slab of items and services you offer and determining the category in which your business is in The next step is to identify the part of GST that is applicable. There are three parts that GST is broken down, CGST GST, SGST, and IGST.
CGST and SGST can be applied to intra-state exchange of services and goods. In a transaction that is intra-state, the items or services are offered within the state while it is IGST that is applicable when the transaction takes place in an interstate relationship between two states.
The GST charged when the transaction is in-state is split between CGST in addition to SGST in the same way that IGST is imposed in a single lump.
Find out if REVERSE CHARGES are involved.
Reverse charges are when the person or person who is receiving the goods or services is liable for taxes instead of the provider. In most cases, the supplier must pay it , however, when making calculations for GST, the recipient should be aware of whether
the
the reverse charge process is used in the transaction or not.
RENROLMENT IN GST COMPOSITION SCHEMA
GST composition scheme GST composition scheme implies that the company opting to participate cannot benefit from input tax credits and cannot conduct interstate transactions. Reverse charge service rates must be paid.
Many companies are finding compliance with GST difficult, which is why they sign up for an arrangement scheme that assists in the aggregation of GST however only businesses with less than Rs75 lakhs are eligible to join this scheme.
The supplier must provide the proper documentation that validates the supplier as a composition vendor. Before calculating it is essential to determine if the provider is enrolled in a scheme.
TRANSACTION Type
The
The
type of transaction is an element that affects taxation of GST. These include: business-to-business transaction or business customer transactions where the amount of goods supplied is less than Rs2.5 lakhs or is it a the type of business-to-customer transactions where the amount of goods supplied is greater than Rs2.5 lakhs.
The sale of goods or services is only referred to as a business to business (B2B) transaction if both participants, the receiver and the supplier have been registered with GST and are registered under GST and have GSTINs. GSTIN.
When a transaction occurs in the B2B form, the beneficiary is not required to receive any tax input credit, or provide any specifics of the GSTIN but if the transaction is valued at more than Rs2.5 lakhs, the information required is name, address and phone number are required to identify the location of supply.