India GST

India introduced its Goods & Services Tax (GST) on 1 July 2017   

It replaced some 20 consumption taxes charged by the Centre and States, including: CENVAT; VAT; Service Tax; Excise Duty; Cessus; Octroi; and various duties.  The aim was to simplify compliance for companies, reduce double taxation caused by overlapping indirect taxes, broaden the tax base and boost the manufacturing sector.  It is a destination-based tax, meaning it is charged in the place of consumption.

Indian GST is a combination of the CGST (Centre or federal governments) and SGST (state).  The dual GST is levied with the sales price, collected by the vendor and then paid separately to the Centre and appropriate State(s).  

Transactions between Indian states

There are 29 Indian states.  Where there are intra-state transactions, the Centre levies IGST (Integrated GST).  Where goods and services are provided by an out-of-state supplier, the supplier must levy IGST.  The customer is entitled to use the IGST credit in their regular GST return.

IGST also applies to imports into India.

Goods and Services Tax Network (GSTN)

To help co-ordinate the submissions and reconciliations of taxable transactions, a not-for-profit institution operates an online portal for filings. Over 7 million tax payers were registered on GSTN at the launch of Indian GST in July 2017.

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