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Welcome to the Reverse GST Calculator! This easy online tool helps you calculate reverse GST with accuracy and speed. Perfect for businesses and individuals, our calculator simplifies reverse GST calculations. No more hassle or confusion.
The Reverse GST Calculator is a tool that helps users determine the pre-tax cost (base price) of a product or service by factoring in the GST rate. This calculator offers various benefits such as accuracy, efficiency, compliance, and informed decision-making. It is essential for businesses and individuals looking to manage their finances effectively and adhere to tax regulations.
A reverse GST calculator determines the pre-GST price of a good or service from the GST-inclusive price. This is useful for comparing prices and calculating actual costs before GST.
It differs from regular GST calculators that calculate the final price including GST. Reverse calculators work backward from the final price to deduce the pre-GST amount.
Reverse GST calculators are important because many businesses must display final, GST-inclusive prices. This makes it hard to compare prices or know the real pre-tax cost. Reverse GST calculators overcome this by letting you calculate the original pre-GST price for analysis and decision-making.
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Reverse GST refers to the process of determining the original cost and GST (Goods and Services Tax) amount from a total price that includes the GST. To find the original cost and the GST amount, work backward from the total, including tax.
Base price = (Final price x 100) / (100 + GST rate)
To calculate reverse GST, you need to find the original cost of a product. This cost was before the Goods and Services Tax (GST) was added. You can do this by using the total amount paid, which includes GST, and the applicable GST rate. Here's an example illustrating how to calculate reverse GST:
Let's say you bought an item for $120, and this price already includes a 10% GST.
To calculate the original cost (before GST was applied), you can use the reverse GST formula: Original Cost = Total Amount / (1 + GST Rate)
Given:
Total Amount = $120 (including GST)
GST Rate = 10% or 0.10 (in decimal form)
Substitute these values into the formula:
Original Cost = $120 / (1 + 0.10)
Original Cost = $120 / 1.10
Original Cost = $109.09
Therefore, the original cost of the item before the 10% GST was added is approximately $109.09.
This calculation helps in determining the initial price of the product before the GST was included in the total amount paid.
There are two easy ways to figure out the GST amount - you either add GST to the original price or remove GST from the total price.
Consider an example, if a laptop costs ₹50,000 and GST is 18%, just take the 18% of ₹50,000 to get the GST amount. 18% of ₹50,000 is 0.18 x ₹50,000 = ₹9,000. So the GST amount is ₹9,000.
GST amount = (Net price × GST rate) / 100
If the total laptop price is ₹59,000 and GST is 18%, we take the total ₹59,000 and remove 18% to get the original price. To remove 18%, we divide the total by 1.18 (to remove the 18% that was added). ₹59,000 divided by 1.18 is ₹50,000. So the original price was ₹50,000.
GST amount = Gross price – [Gross price × {100 / (100 + GST rate)}]