Calculators

Financial

Sales

Calculator Use

Calculate gross value and/or gross charges resulting from service taxes in India.

Amount

This can be either the gross amount charged or the gross value of your services.  If this is the gross amount charged, taxes will be back calculated out to find the gross value and tax amounts. If this is the gross value, taxes will be calculated on this amount to find the gross charge.

Amount Includes Taxes

Check this box if the amount entered already includes taxes.

Service Tax

This is the rate of service tax. See http://www.servicetax.gov.in/st-proc-home.htm for current rates.

Education Cess

The Education Cess tax rate on the service tax.

Higher Ed. Cess

The Secondary & Higher Education Cess tax rate on the service tax.

Gross Value

The value of services provided.

Gross Charge

The total amount, including taxes, charged for services.

Example where Amount does not include taxes

• Gross value of services provided is Rs. 14,060.00.
• Service Tax is 12%
• Rate of Education Cess is 2% of the total Service Tax
• Rate of Secondary & Higher Education Cess is 1% of the total Service Tax
• Calculations
  • Service Tax (ST) = 14060.00 * 12% = 14060.00 * 0.12 = 1687.20
  • Education Cess = ST * 2% = 1687.20 * 0.02 = 33.74
  • Higher Ed Cess = ST * 1% = 1687.20 * 0.01 = 16.87
  • Adding these up, the total tax is Rs. 1737.81.
  • Gross charge, including taxes, is 14,060.00 + 1737.81 = Rs. 15,797.82

The total tax rate can be calculated as 12% + (12% * 2%) + (12% * 1%). Converting to decimals and calculating the total tax is 0.12 + 0.0024 + 0.0012 = 0.1236 or 12.36%.  You should now be able to use 12.36% to calculate the total tax without calculating each tax separately.

Example where Amount does include taxes

• Gross Charge to customer including taxes is Rs. 100.00.
• Service Tax is 10%
• Rate of Education Cess is 2% of the total Service Tax
• Rate of Secondary & Higher Education Cess is 1% of the total Service Tax
• Calculations
  • Gross charge = Value + (Value * 10%) + (Value * 10%) * 2% + (Value * 10%) * 1%
  • Gross charge = Value*[1 + 10% + (10% * 2%) + (10% * 1%)] = Value*1.103, now in decimal form
  • Since our Gross Charge is 100; Value = 100/1.103 = 90.66
  • Using Rs. 90.66 as the gross value of services we can now forward-calculate the individual taxes.
  • Service Tax (ST) = 90.66 * 10% = 90.66 * 0.10 = 9.07
  • Education Cess = ST * 2% = 9.07 * 0.02 = 0.18
  • Higher Ed Cess = ST * 1% = 9.07 * 0.01 = 0.09
  • Adding these up, the total tax is Rs. 9.34.
  • Checking our math, the gross charge, including taxes, is 90.66 + 9.34 = Rs. 100.00

The total tax rate can be calculated as 10% + (10% * 2%) + (10% * 1%). Converting to decimals and calculating the total tax is 0.1 + 0.002 + 0.001 = 0.103 or 10.3%.

References

Directorate of Service Tax, Mumbai; Department of Revenue, Ministry of Finance, Government of India http://www.servicetax.gov.in/st-proc-home.htm