India GST rate rationalisation
- Jun 10, 2018 | Richard Asquith
India is on track to cut the number of Goods & Services Tax (GST) rates from four to three – excluding zero-rated supplies. The current rates are: 28%; 18%; 12% and 5%. The Finance Minister, Shiv Pratap Shukla, said on 8 June that details will be published in the forthcoming weeks.
India GST complexity
The Indian Goods and Services Tax system is among the most complex in the world with not only one of the highest tax rates but also one of the largest number of tax slabs. India has the highest GST rate, 28%, in Asia, and second highest in the world after Chile. Only four other countries have four or more GST or VAT rates: Italy, Luxembourg, Pakistan and Ghana.
However, the cost of the simplification may be to bring more goods and services into the net of GST, introduced on 1 July 2017. This would include levying GST on petrol and diesel for the first time. Currently, petroleum products are still subject to the old VAT tax regime charged by the Centre (federal government) and local states.