How to Calculate GST Correctly — Common Mistakes to Avoid
GST calculation trips up even experienced accountants. Here's the correct way to handle inclusive and exclusive pricing.
By EpicToolify Editorial
India's Goods and Services Tax replaced a complex web of indirect taxes when it launched in July 2017. Despite its simplification goals, GST calculation remains a source of errors for many businesses and individuals.
The two most common scenarios are GST-exclusive (adding tax to a base price) and GST-inclusive (extracting tax from an all-in price). The formulas differ: GST-exclusive multiplies by (1 + rate/100), while GST-inclusive divides by (1 + rate/100).
Always verify the applicable GST rate for your specific goods or service category with a qualified chartered accountant, as rates are subject to change by the GST Council.