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India GST goes live 1 July 2017

  • GST
  • 30 June 2017 | Richard Asquith

India GST goes live 1 July 2017

India most significant tax reform, the introduction of a single Goods & Services Tax (GST), goes live today.

The GST regime will replace over 20 overlapping indirect taxes - including VAT, CENVAT and Service Tax.  It will unite India’s 29 states with a single regime, simplifying compliance and eliminating double taxation to potentially boost the country’s growth by up to 2% per annum.  In particular, the new regime will reduce the distorting tax burden on local production vs. exporting.  The new system will also broaden the tax base.

Indian Goods & Sales Tax features

  • Based on OECD model of VAT, including charging GST throughout the production chain on B2B transactions with the right for businesses to recover GST suffered (‘Input Tax Credit’).  The ultimate tax bill falls on the final (non-business) consumer
  • Destination-based tax, with GST due into the state of consumption
  • Four rates on goods and services: 28%; 18%; 12%; 5%
  • Zero rating and exemptions
  • Financial services, including banking and insurance taxable
  • Businesses must register in every territory where they provide taxable services - there are 29 Indian states
  • Registrations, returns and remittance is handled online
  • Returns will be due monthly: 1st return with Sales by 10th; 2nd with Purchases by 15th; and final with GST due 20th.  Sellers and customer must agree invoices prior to final return.
  • Annual return
  • Means 37 filings per annum per state where trading

Find out more about India's Goods & Sales Tax.

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.