India — Value-added tax (VAT)
|General VAT Rate||Other Rates||Local Currency|
|12%||20%, 4%-5.5%, 1%, 0%||Rupee (INR)|
India's general VAT rate is 12%, with other rates including 20%, 4%-5.5%, 1% and 0% that can apply to certain transactions.
India's VAT rate varies from 12.36% to 15% depending on which state you are in. The main VAT, called CENVAT, is made up of 12% rate + 3% Education Excess on the 12% = 12.36 since March 2012. India also has a service tax called GST of 15%, implemented in June 2016.
India is a member of the Asia-Pacific Trade Agreement (APTA), South Asia Free Trade Area (SAFTA), Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) trading bloc, which may affect international VAT collection and regulations.
Consumption Taxes in India
India has multiple consumption taxes, which apply in different situations depending on what purchase is being made. These taxes include the following:
Central sales tax (CST)
Entry tax (specific to states)
Goods and services tax (initially proposed to be introduced in 2016 but more likely to be 2017)
These taxes were introduced in India at the following times:
- Implemented in most of the states in India, effective from 1 April 2005 (replaced the sales tax regime)
- Service tax
- 1994 (scope gradually widened and shifted to a negative list system in 2012)
- Excise duty
- Customs duty
- Entry tax
- Levied and administered by the states
- Levied by the central government, but collected and administered by the states
- Service tax
- Levied and administered by the central government
India VAT rates for 2020
- Ranges from 12.5% to 15% among the states
- 0%, 1%, 4% to 5.5% (depending on the products and state legislation) and 20%
India CST rates for 2020
- Goods purchased for resale, use in manufacturing or other specified usage
- 2% (against issue of statutory Form C by the customer)
- Other cases
- VAT rate applicable in the state of origin (where Form C is not available)
India VAT number format
Businesses in India that are required to collect tax will be issued an identification number. Tax identification numbers can be verified with the , and will follow a certain format. The VAT number format is 11-digit number format; first two digits identify the state of registration.
India VAT and CST return periods
Businesses in India that are required to collect tax from consumers must file regular tax returns with the in New Delhi. India's VAT and CST return periods are:
India Service tax return periods
Businesses in India that are required to collect tax from consumers must file regular tax returns with the in New Delhi. India's Service tax return periods are:
India Value-added tax (VAT) Thresholds
These are the revenue thresholds at which businesses in India are required to start collecting and remitting tax.
- VAT registration
- Generally INR500,000 but varies from state to state
- CST registration
- Service tax registration
Recovery of VAT by non-established businesses
Non-established businesses are small, unincorporated businesses that sell taxable goods and may consist of a single individual, or several. Non-incorporated businesses in India are not required to collect taxes from the consumer.
India VAT Refunds
Many countries allow tourists, and others making purchases for export, to receive a VAT refund on exiting the country (or make purchases VAT free). While we don't have data on the India VAT refund program, more info can be obtained from the .
India Tax Sources & Citations
- EN: India Value Added Tax
- RU: НДС
- CN: 增值税
- Ernst & Young global VAT tax study, India (updated 2020)
← Back to World VAT Rates