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 no invoice is issued to the buyer, and no entry is posted for such sales in their books.
With the new GST rules on the wholesale and retail industry, every invoice with taxable supply has to be uploaded on the GSTN portal. It needs to be accepted by the buyer, retailers and wholesalers, thereby reducing tax evasion.
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 manageable 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 is levied. This shows how the GST liability, and thus the end price is borne by the consumer, has been 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:
DISCLAIMER:
While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent inaccuracies or typographical errors or delays in updating the information. The material contained in this site, and on associated web pages, is for reference and general information purpose and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. In case any inconsistencies observed, please click on reach us.
*Terms and conditions apply
