It’s a tax system that’s applied to certain purchases in a handful of countries around the world. This includes Canada, Australia, and India.
How is GST calculated?
Goods and Services Tax (GST) is calculated as a percentage of the total taxable sale. It’s a flat-rate consumption tax that’s charged at each stage of the production chain and at the final sale of a product.
The cool thing is that, as a business owner, you get back whatever GST you’ve paid in the chain. Only the end consumer pays out of pocket, and you remit that tax to the government.
How to add GST
You should add GST to the purchase total as a separate line item, both at the point of checkout and on the receipt or invoice. You can automate this with a tax compliance software like Quaderno.
In some countries, you’re legally required to advertise prices that are inclusive of GST, meaning you add tax to the product price even before checkout. Be sure to check the local rules in the countries where you’re selling.
At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or accountant.
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