Advanced Goods & Services Tax computation engine with Input Tax Credit, Reverse Charge Mechanism, and Composition Scheme analysis for businesses and professionals.
Enter transaction details for accurate GST computation
Real-time computation with detailed breakdown
Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services across India, implemented on July 1, 2017. It replaced multiple cascading taxes levied by the central and state governments, creating a unified national market. GST follows a destination-based consumption tax model where tax revenue accrues to the state where the goods or services are consumed rather than where they are produced.
For Regular (Intra-state) Transactions:
For IGST (Inter-state) Transactions:
Scenario: A manufacturer in Maharashtra sells machinery worth ₹50,000 to a dealer in the same state. GST rate is 18%.
Calculation:
Scenario: A consulting firm in Delhi provides services worth ₹1,00,000 to a client in Karnataka (Inter-state). They have eligible Input Tax Credit of ₹8,000 from business expenses.
Calculation:
Scenario: A small restaurant with annual turnover of ₹85 lakhs opts for Composition Scheme. Turnover for the quarter is ₹20 lakhs.
Calculation:
Input Tax Credit is the backbone of GST that eliminates cascading tax effects. Businesses can claim credit for GST paid on inputs (purchases) against GST liability on outputs (sales).
ITC Eligibility Conditions:
Under RCM, the recipient of goods/services pays GST instead of the supplier. This applies to specific transactions like imports, purchases from unregistered dealers, and certain notified services.
A simplified scheme for small businesses with turnover up to ₹1.5 crore (₹75 lakhs for special category states). Benefits include lower compliance burden but with restrictions like no interstate sales and no Input Tax Credit.
To calculate GST with Input Tax Credit:
Example: If Output GST = ₹50,000 and Input GST Credit = ₹35,000, Net Payable = ₹15,000.
CGST (Central GST): Collected by Central Government on intra-state supplies. Rate is half of the total GST rate.
SGST (State GST): Collected by State Government on intra-state supplies. Rate is half of the total GST rate.
IGST (Integrated GST): Collected by Central Government on inter-state supplies and imports. Rate equals total GST rate.
Rule: For intra-state (within same state) transactions: CGST + SGST apply. For inter-state (between states) transactions: IGST applies.
As of 2026, India maintains four primary GST rate slabs:
| Rate | Category | Examples |
|---|---|---|
| 0% (Nil Rated) | Essential items | Fresh fruits, vegetables, milk, bread |
| 5% | Common use items | Tea, coffee, edible oil, medicines, transport |
| 12% | Processed foods | Butter, cheese, packaged foods, mobile phones |
| 18% | Standard rate | Most goods and services, AC hotels, telecom |
| 28% | Luxury/sin goods | Cars, cigarettes, luxury hotels, aerated drinks |
Reverse Charge Mechanism (RCM) shifts the tax payment responsibility from supplier to recipient. Key applications:
Calculation: RCM Liability = Purchase Value × Applicable GST Rate. This ITC can be claimed in the same tax period.
The Composition Scheme is ideal for:
Benefits: Simplified compliance, fixed GST rate (1%-6% of turnover), quarterly returns.
Drawbacks: No Input Tax Credit, no interstate sales, limited market reach.
Time of Supply determines when tax liability arises and which tax rate applies. It's crucial for:
Importance: Determines tax period for return filing, applicable tax rate (if rates change), and interest calculation for delayed payment.
Exports: Zero-rated supplies - 0% GST. Options:
Imports: Treated as inter-state supplies. Tax components:
Import IGST can be claimed as Input Tax Credit against output liability.