How to Estimate Your GST Challan

Estimate Your GST Challan


The GST Bill has proved to be a much-needed milestone in the taxation system of India. The intention behind the introduction of GST was to curb double taxation bysubsumingall other taxes like VAT, Excise Duty, and Service Tax under one common tax, Goods and Service Tax (GST). A multi-tier tax-slab was implemented. The effect – many items of everyday use became cheaper, while many luxury items became dearer. It is being observed that the notion of “One Nation, One Tax” has benefitted the manufacturers, wholesalers, retailers, and eventually, the end users too while offering the government its due share of taxes.

There are numerous GST software solutions that can help you with calculating the GST charges and estimating your GST challan. But an underlying understanding of the types of GST is necessary to get a clear picture. There are four types of GST:

CGST : The revenue collected under the Central Goods and Service Tax (CGST) is for the central government.

SGST : State Goods and Service Tax (SGST) is meant to be the revenue of each individual state.

IGST : Integrated Goods and Service Tax (IGST) is levied when there is inter-state transportation/movement of goods or services. The revenue is shared between the state and Central Government.

UTGST : Union Territory Goods and Service Tax (UTGST) accounts for all the taxations happening in the five union territories of India that include Andaman and Nicobar Islands, Dadra and Nagar Haveli, Chandigarh, Lakshadweep, and Daman and Diu. Puducherry and Delhi have their own legislatures, hence SGST is applicable in these two regions.

Calculating the value of a product after GST is fairly easy at any point in the life-cycle of the product, whether be it with the manufacturer, or wholesaler, or retailer. Just add in the GST percentage to the cost of the item. It’s that simple, you don’t need any kind of GST calculator for this!

Now, let us estimate a GST challan for a product and compare it with its pricing in the previous tax regime. Take for instance, a product that costs INR 10,000 to make. Consider a 10% profit margin each for the manufacturer, wholesaler, and retailer, and the GST rate to be 12%.


Cost of the item 10,000 10,000
Profit margin @ 10% 1,000 1,000
Excise duty @ 12% 1,200  
Total cost of production 12,200 11,000
Vat @ 12.5% 1,525  
SGST @ 6%   660
CGST @ 6%   660
Total invoice value 13,725 12,320



Cost of the item 13,725 12,320
Profit margin @ 10% 1,372.50 1,232
Total value 15,097.50 13,552
Vat @ 12.5% 1,887.19  
SGST @ 6%   813.12
CGST @ 6%   813.12
Total invoice value 16,984.69 15,178.24



Cost of the item 16,984.69 15,178.24
Profit margin @ 10% 1,698.47 1,517.82
Total value 18.683.16 16,696.06
Vat @ 12.5% 2,085.40  
SGST @ 6%   1001.76
CGST @ 6%   1001.76
Total invoice value 20,768.56 18,699.58


It is quite evident from the above example that GST is imparting a positive impact on the overall economy of the country by reducing the overall costs for everyone involved in the manufacturing and supply chain. Many GST software applications are available to help you with your GST challan estimations and GST filings. The Government has also recognized several GSPs (GST Suvidha Providers) to help individuals and SMEs with their GST compliance and filing needs. Here are some features you should look for while selecting a GSP for your business. If you are looking for a capable and up-to-date GST solution, Vayana GSP has the best GST software in the offering for your business.