The Simple Steps to Calculate GST
We need two pieces of information to start:
The GST Rate: This is a percentage. In India, for example, common rates are 5%, 12%, 18%, and 28%. You’ll know this based on what you’re buying (e.g., a restaurant meal might be 5%, a phone might be 18%).
The Original Price: The price before tax.
Let’s use a simple example. Imagine you’re buying a blender, and its pre-GST price is ₹1,000. The GST rate applied to it is 18%.
Adding GST to find the Final Price
This is the most straightforward calculation. You have the base price, and you need to find out how much to charge your customer.
Step 1: Calculate the GST Amount
This is just a simple percentage calculation.GST Amount = Original Price × (GST Rate / 100)
For our blender:
₹1,000 × (18 / 100)Which is:
₹1,000 × 0.18GST Amount = ₹180
Step 2: Add it to the Original PriceFinal Price = Original Price + GST Amount
For our blender:
₹1,000 + ₹180Final Price = ₹1,180
So, you would charge the customer ₹1,180.
You can also do this in one go:Final Price = Original Price × (1 + GST Rate/100)Final Price = ₹1,000 × (1 + 0.18) = ₹1,000 × 1.18 = ₹1,180