FAQ: Goods and Services Tax in India

One of India’s biggest economic reforms, the Goods and Services Tax (GST) is set to be rolled out on July, 1st 2017. GST will significantly benefit Indian businesses and foreign investors alike. An overview of the what the GST changes for Swiss companies by our Swiss Business Hub India:

The Taj Mahal in India.

In particular, for foreign investors, GST will mean a more simplified and efficient tax system. While the previous tax system allowed different states to tax the same items at different rates and in different ways, GST harmonise tax rates and processes to a large extent.

What is the GST about?

The GST is a stage wise destination based consumption tax. It is a broad based and a single comprehensive tax levied on goods and services consumed in an economy. Furthermore, the GST is a uniform single tax across the supply chain.

Which other taxes are subsumed in the GST?

The GST subsumes:

  • The Property Tax and Stamp Duty
  • Professional Tax
  • Electric Duty

It does not subsume:

  • Excise Duty on alcohol for human consumption
  • Customs Duty
  • Excise Duty on petroleum products

Which products and services are affected by the GST?

The GST council has approved tax rates for various products. The links provided in the document under the download section gives an overview of the rates.

What do I have to consider as a foreign company with subsidiary in India?

Any supply of goods or services from a foreign HQ to an Indian subsidiary or branch (even if there is no contribution flow) will have to be valued and GST will be applicable

For any procurement made from an unregistered supplier, the company procuring the good or service will have to pay GST on reverse charge on all such procurements. Therefore it is essential to ensure that all suppliers are GST registered.

Find more information about payment, registration and refund in the paper of our Swiss Business Hub India in the download section.

Furthermore, our senior consultant Beat Ineichen will be happy to help you with any question regarding the GST. Contact now




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