What’s the Difference between VAT Calculator and GST? Why & Where Do We Use Them?

The government of a country earns revenue through taxes. It applies different kinds of taxes and the money is used for development purposes. VAT and GST are two of key taxes applied on residents. A brief perception that these two taxes are applied on products that we purchase. However, there are various differences between these two types. To calculate them properly, you should have a clear understanding of both of them. Before we go through the uses of VAT calculator and GST calculator, let us go through the differences between VAT and GST.

Major Differences between VAT and GST

Some of the key differences between these two tax types are listed below

  1. Point of application

If someone says that VAT and GST do not differ in any way, he needs to correct his concepts. One of the biggest differences between these tax types is the point at which they are applied. VAT is applied in a stage wise way. A product is developed after going through different stages. For instance, a shirt goes through the steps of stitching, dying and packaging. VAT is applied at every stage which adds value to the product. With calculators.tech VAT calculator, you can check out the exact value of VAT during the product production stage. The use of a VAT calculator makes things easy. It is a helpful online tool which can be used to determine value added tax. As compared to VAT, GST is not applied in a step wise manner. It is applied in one go on the consumption of goods. On the other hand, VAT is applied on the production of goods.

  1. Supply Vs Sale

GST is applied on both products and services but this is not the case with VAT. If you talk about services, VAT is not applied on it because services do not go through a stage wise development process. VAT is only applied on the sale of goods.

  • GST is not applied on the sale of goods like VAT. It is more connected to the supply of goods and services. The tax is applied when goods or services are supplied. Hence, it does not have anything to do with the product development process.

Where is VAT calculator used?

The differences between VAT and GST have been explained above with complete clarity. Now let us go through uses of each of these calculators.

Here are some purposes for which the VAT calculator is used.

  1. Usage by product owners

A product owner has to be well aware of the stages that his product goes through. He should know about the tax that is applied at each stage of development. Product owners do not have the time to manually determine the tax value. They use an online calculator and calculate the sum which has to be paid. VAT is added to the actual price of the product and paid by the consumer.

  1. The usage by Tax professionals

Tax professionals keep a close look on the development processes of products. They perform extensive calculations to determine the VAT charged. In addition to that, these experts have to perform several calculations at a time. The VAT calculator is a fast tool that produces the calculated amount within no time. Tax professionals work with very tight deadlines and rough routines. Hence, they simply cannot manage to perform these calculations without using a proper tool.  The VAT calculator is good alternative for them.

Uses of GST calculator

Just like the VAT calculator, the GST calculatorhas its purposes as well. Some key purposes for which it is used are mentioned below.

  1. Service Providers

According to GST regulations, it is applied on service providers as well. If you are providing a particular service to the consumers, you would have to keep a check on the GST being paid. Service providers use this tool to keep a check on financial proceedings.

VAT and GST calculators are convenient to use

 For any user who is using an online tool, ease of use is the most critical factor. Both VAT and GST calculators are helpful tools and make things easy for the users.

  • These tools can be used online without limiting yourself to one device. There is no need to download any supporting software or application. The user only has to click the link of the tool before using it.

Summing It Up

If you are a consumer or product owner, you should know about the tax being charged and why you have to pay it. VAT is charged in a stage wise manner. When a product is being developed, it goes through intermediate stages. Some of these stages add value to the product. The VAT is charged at every stage which increases the product value.

GST is not applied in the same way as VAT. It is charged on supply or products or services. Hence, product suppliers use this tool to keep a check on what they have to pay. This tool is online as well and does not have any usage restrictions.