How to calculate GST returns


What is GST Tax

GST or Goods and Services Tax return is a document filed by the business person with the tax administrative authorities. Tax administrative authorities then use the information in calculating net tax liability. GST returns have turned upside down the way we used to look at business. It changed the way business persons used to look at the business. If you are wondering how to calculate the GST returns, here are the steps to do that:

Step 1:

The first thing you need to do is to decide exactly which slab rate your goods and services come under. Then you must decide which type of business you are running. This basically means what kind of goods or services you provide in your business. If your business provides goods, the next thing you need to know is HSN code and if it’s a supply business then you need to know SAC code.

After you know what your HSN code or SAC code is, you need to find out under which slab of GST tax rate the supply fits into. There are 5 slab rates created by the GST council. They are NIL/0%, 5%, 12%, 18% and 28% for both goods and services.

Step 2:

In step 2 you need to decide which is your place of supply. Often the place from where you get your goods and services is the address you require. You need to figure out under which applicability your business falls into; whether it is IGST or CGST and SGST. The determination of the place of supply is more complex in case of e-commerce or OIDAR services.

Step 3

According to the rule laid down by the GST, the supplier of the goods or service can collect tax from the recipient and give back the same to the government. But there are some services such as reverse charge services where the receiver is made liable for payment of GST.

Step 4:

According to the new GST rule, it says that the supplier needs to maintain extensive accounts, records and file 3 GST forms in a month. There are businesses that are small in nature and have a turnover of Rs. 75 Lakhs per year. They can get under the GST Composition Scheme and pay a flat GST based on their aggregate turnover. In step four you need to check whether your supplier comes under the scheme or not.

Step 5

In step 5 you need to check under which category your business comes under. Whether it is a B2B or business to business or B2C that is business to consumer. You need to know that if it is B2B, is the value of the supply Rs. 2.5 lakh or whether it is B2C where the value of the supply is less then Rs. 2.5 Lakh.

The Bottom Line:

Under GST a regular business can file annual GST returns or monthly GST returns. The total returns filed by each business person is 26 returns in the financial year. GST is applicable on the consumer goods and is remitted by the business persons to the government. You can now calculate your GST returns. Check out Finserv MARKETS for more.

Pax Heber
the authorPax Heber