This presentation takes you to the overview of GST calculation in India. Know the federal nature of India, and the process of GST calculation in India.

1. A Glance to GST Calculation in India
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The Goods and Services Tax Act in India has subsumed all the earlier taxes
removing its cascading effects. As of now, more than 10 million taxpayers
are registered under the regime. The government has also substantially
collected revenues of around INR 93,000 crore in a month being the highest
since the roll-out of the regime.
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What is GST?

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The Goods and Services rolled-out on July 1st, 2017 taking the entire nation
by surprise. With the idea of eliminating evasion and increasing the revenue
collection, the government gave a final nod on the following features of the
regime:
1. Dual GST that means both the center
and state government could levy the tax.
2. The destination-based nature of the
taxation.
3. Five different tax categories
(0% or nil, 5%, 12& 18%, and 28%).
4. 37 returns to be filed in a financial
year by the registered taxpayers.
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Features of the Goods and Services Tax

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The federal nature of India
According to the constitution, India despite being a democratic nation is
also federal. The federal system in a nation allows both the central and state
government to enforce laws, make the developments of general interest
and also to levy and collect taxes.
So, keeping the GST dual in nature, the government obeys the rules of the
constitution and also ensures that the regime functions all around the nation
with integrity and honesty.
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As per the rules and regulations of the Goods and Services Tax Act, the
process of GST calculation in India is divided into three categories:
1. CGST- Center Goods and Services Tax
2. SGST- State Goods and Services Tax
3. IGST- Integrated Goods and Services Tax
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The Tax Calculation

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Once the type of transaction is identified that whether it’s center, state, or
integrated, the tax category under which the transaction is falling is to be
determined. Identifying the tax category is quite difficult as the government
has categorized the goods and services under different slabs.
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For example, the transaction falls under 18% category then the applicable
tax would be divided equally between the center and state government.
Net applicable tax- 18%
CGST- 9%
SGST- 9%
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Since the regime is destination based, the taxpayers are also supposed to
determine the HSN/SAC codes applicable to the transaction. This makes
the calculation of the tax error-free and also facilitates the process of return
filing.
HSN stands for harmonized system nomenclature. It is used for the
classification of all the goods that fall under the Goods and Services Tax
Act.
SAC stands for services accounting codes. It is used for the classification of
all the services that fall under the Goods and Services Tax Act.
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Determining the codes

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Eliminating other values
Under the Goods and Services Tax Act, a business could claim the money
paid on inputs of a product. Thus, while calculating the applicable tax, the
taxpayer must distinguish the amounts like:
1. ITC (Input Tax Credit)
2. Transactions with composition dealers
3. Pending returns
4. Penalty or fine, if any.
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The payment date
If a business has a turnover limit of INR 20 lakhs,
then it is required to pay the tax to the
government on the monthly basis. The date for
the tax payment is 20th of the next month. In
case a business fails to pay the tax by the due
date, then it is required to pay a penalty along
with the tax.
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