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Impact of GST on Wholesalers and Retailers

GST Rules for Wholesalers & Retailers

In the current indirect tax regime, retailers and wholesalers could evade taxes as there is no mechanism by which actual transactions can be tracked. Hence, most transactions are done in black, where there is no invoice that is issued to the buyer, and in their books no entry is posted for such sales.
With the new GST rules on the wholesale and retail industry, every invoice with taxable supply has to be uploaded on the GSTN portal and needs to be accepted by the buyer, retailers and wholesalers, thereby reducing tax evasion.

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GST Calculation Formula

Businesses, wholesalers and retailers can calculate their GST liability easily by using the below GST formula. Alternatively, with the help of a GST calculator, computation becomes even more easier and quicker.

  • Where GST is excluded:
    GST Amount = (Value of supply * GST%)/100
    Price to be charged = Value of supply + GST Amount

  • Where GST is included in the value of supply:
    GST Amount = Value of supply – [Value of supply x {100/(100+GST%)}]

How to Calculate GST for Wholesalers & Retailers

“Manufacturers and wholesalers can calculate the GST applicable on goods and services along with the final or the gross price. Below is an illustration comparing the GST liability before and after GST being levied. This shows how the GST liability, and thus the end price borne by the consumer, has reduced.

Particulars Rate(%) Amount Pre-GST Amount under GST
Cost of the product 278,438 246,400
Profit 10% 27,844 24,640
Total 306,282 271,040
VAT (Rs. 306282 x 12.5%) – (Credit on VAT paid above Rs. 30,938) 12.50% 7,347 Nil
CGST (Rs. 271040 x 6%) – (Credit on CGST paid above Rs.13,200) 6% Nil 3,062
SGST (Rs. 271040 x 6%) – (Credit on SGST paid above Rs.13,200) 6% Nil 3,062
Final Invoice to the end-consumer 313,629 277,164

Related Post:
How to calculate GST
How to calculate GST on laptops & computers

GST Calculator for Wholesalers and Retailers

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