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India GST rate of 27%?

  • Apr 20, 2015 | Richard Asquith

India GST rate of 27%?

As the Indian GST implementation gears up towards the proposed 1 April 2016 date, discussions are ongoing as to the combined standard rate. This is known as the Revenue Neutral Rate as it is calculated to consolidate the existing VAT, CENVAT and Service Tax rates to ensure that the Centre and States are fully compensated for the consumption tax change.

At present, the Indian GST rate is proposed at 27%. This is a blend of state and central GST – approximately 50:50. This however excludes petrol and alcohol products. There is also the right to charge an additional 1% for the States where any goods movements across state borders originate from.

The final rate will be decided upon by the GST Council, which includes finance representatives from Delhi and the States.

The roll out of a simplified GST regime is seen as a central part of the Modi government reform package. It is estimated that its elimination of overlapping taxes could add up to 2% to GDP.

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 won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.