India V.A.T 2025

India Goods and Services Tax (GST): Information for Foreign Investors

GST Implementation:

• The Goods and Services Tax (GST) was implemented in India on July 1, 2017.  
• GST is an indirect tax that replaced multiple previous indirect taxes.  

Nature of GST:

• GST is a destination-based consumption tax.  
• It is levied on the supply of goods and services.

GST Structure:

• GST has a dual structure:
  • Central Goods and Services Tax (CGST): Levied by the central government.  
  • State Goods and Services Tax (SGST): Levied by the state governments.  
  • Integrated Goods and Services Tax (IGST): Levied on inter-state supplies.
     

GST Rates:

• GST rates vary for different goods and services.  
• Common GST rates include 0%, 5%, 12%, 18%, and 28%.  
• Specific goods and services may have other applicable rates.

GST Registration:

• Businesses involved in the taxable supply of goods or services exceeding specified thresholds are required to register for GST.  
• Foreign businesses conducting taxable transactions in India may also be required to register.

Input Tax Credit (ITC):

• Businesses registered for GST can claim Input Tax Credit (ITC) on eligible purchases.  
• ITC can be used to offset output GST liability.

GST Returns:

• GST returns must be filed electronically.  
• The frequency of GST return filing varies depending on the business's turnover.

Imports and Exports:

• Imports into India are subject to IGST.  
• Exports from India are generally zero-rated.

E-commerce:

• E-commerce transactions are subject to Indian GST rules.