VATLive > Blog > GST > India GST one year on - Avalara

India GST one year on

  • GST
  • 19 August 2018 | Richard Asquith

India GST one year on

It is now one year since the overhaul of India’s complex and overlapping indirect tax regime, and the introduction of a Goods and Services Tax (GST). The new unified indirect tax was designed to simplify compliance, and end large-scale double and compounding tax for business which was stifling the manufacturing sector.

Good start; more progress needed.

There have been several success in terms of the reforms, reducing the compliance burden, but further work is still required if the tax is to realise one of its central aims – give the country a tax regime that is efficient, tax neutral for business and easy to understand.

  • GST has broadened the tax base, which gives the government stability in its revenues. The number of GST payers has grown to 10.1 million from 6.4 million.
  • The number of companies now ‘compliant’ has reached 65% compared to the initial level of 55%. The shortfall of projected revenues has now narrowed. However, this is short of the INR 744 billion target
  • The number of GST rates, six (0%, 3%, 5%, 12%, 18% and 28%), is high by international standards and results in confusion, scope for manipulation and fraud. There have been reclassifications recently towards just three rates
  • VAT credits, particularly for exporters, have been slow and caused cash flow difficulties for many businesses
  • There have been a large number of revisions to the regime, which have been difficult to keep track of
  • The major challenge came with the IT functioning for the complex GST return clearing system – Goods and Services Tax Network. This was ultimately withdrawn, to be reformed over the next six months
Latest Indian news
India extends Sept GST return deadline
October 21, 2018

India has extended by 5 days the deadline for the filing of September's Goods and Services Tax return. The new filing deadline for the GSTR-3B...
India confirms e-commerce withholding GST rates
September 26, 2018

India has confirmed the GST withholding rates for online marketplaces handling third party transactions. Tax Collected at Source (TCS) is a means of collecting income tax...
India extends GST filing deadline
September 25, 2018

India has announced an extended deadline for the GSTR-1 return which lists taxable sales for each reporting period. It is generally due by the 10thof...

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.