How to calculate GST returns

The new Goods and Services Tax (GST) has changed the way businesses use to bill their clients and or customers. If you are one those wondering how to calculate

GST returns

, here is a step by step guide for you:

Step 1: The first step is to find the exact slab rate for the goods or services under the GST Act. To find GST Rate, you will have to determine the type of supply item, i.e., whether is it a good or a service. If the supply is a good, find the HSN Code and if the transaction involves the supply of a service, then find the SAC Code. Here's how to find GST HSN and SAC code

Once you know the HSN or SAC Code, then find out under which slab of GST tax rate the supply fits into. The GST Council has created 5 different slab rates at NIL/0%, 5%, 12%, 18% and 28% for both goods and services. Click here to find the list of goods and service tax rates

Step 2: Once you know the GST rate, next find out the applicability of IGST or CGST and SGST. To do so, you need to determine the place of supply first. Mostly, the place where the supply of goods or services was done would be the address where the goods or the service was provided. But in case of e-commerce or OIDAR services, the determination of the place of supply is a more complex issue.

Step 3: Under GST rule, the supplier of the goods or service can collect tax from the recipient and remit the same to the government. However, there are some services like 'reverse charge services', where the recipient is made liable for payment of GST.

Step 4: According to new GST rules, suppliers must maintain extensive accounts, records and file 3 GST forms in a month. However, small businesses having a turnover of less than Rs 75 lakhs, can enrol under the GST Composition Scheme and pay a flat GST based on their aggregate turnover. You should check whether your supplier is enrolled under GST Composition Scheme or not.

Step 5: Next is to find out the type of transactions, for example - Business to Business; Business to Consumer where the value of supply is more than Rs 2.5 lakhs; or Business to Consumer where the value of supply is less than Rs 2.5 lakhs.

1. How to compute GST return?This can be done by subtracting the comprehensive GST you have paid on your purchases and expenses (available on the box 14 on your return) from the holistic GST you have received from your sales and income (available on the box 10 on your return).
2. How many GST returns are available to claim?A regular business can file either monthly returns or annual returns under GST. The total of this comes to around 26 returns in a single financial year.
3. How to calculate late fees for GST?There is a penalty of 5% of the balance owing plus the 1% of your balance owing for each full month your return is late, subject to a maximum of 12-month time-period.
4. Is GST computed on MRP?Yes, MRP or maximum retail price is inclusive of all taxes including GST too. No retailer can charge GST over and above the MRP.

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