Rounding-off of tax amounts may differ from one tax compliance to another. Rounding off in GST may not have an enormous impact on the tax bill, but it can burn a hole in the pockets of many businesses and impact their GST compliance rating. There are many taxpayers want to know GST round off calculator, round off in bill, gst round up or down and so on. We will help you to aware all GST rounding off information here.
Rounding off under GST is defined under Section 170 of the CGST Act. The act says - “the amount of tax, interest, penalty, fine or any other sum payable, and the amount of refund or any other sum due, under the provisions of this Act shall be rounded off to the nearest rupee and, for this purpose, where such amount contains a part of a rupee consisting of paise, then, if such part is fifty paise or more, it shall be increased to one rupee, and if such part is less than fifty paise, it shall be ignored.” But what about round off HSN code. That means, rounding off is applicable on the following:
It is also applicable to any sum that is refundable to the taxpayer from the Government.
It has been observed that taxpayers are currently interpreting the definition of rounding off in two ways:
Rounding off can be categorised into three types:
Normal rounding off denotes rounding off any amount of fifty paise or more to one rupee. E.g., if the amount is Rs.1,34,654.50, then the amount is to be rounded up to Rs.1,34,655.00, or if the amount is Rs.1,34,654.40, then the amount is to be rounded down to Rs.1,34,654.00.
Upward rounding off denotes rounding off any amount in decimals to one rupee. For e.g., if the amount is Rs.1,34,654.35 or Rs.1,34,654.75, then the amount is to be rounded up to Rs.1,34,655.00.
Downward rounding off denotes ignoring any amount in decimals. For e.g., if an amount is Rs.1,34,654.35 or Rs.1,34,654.75, then the amount is to be rounded down to Rs.1,34,654.00.
Let us look at few examples with multiple tax items of GST within round off in invoice and apply the definition of Rounding off Tax under GST:
The rounding-off of tax amounts may seem minuscule or irrelevant but can result in sizeable differences in tax liability for businesses with a high volume of invoices.