The standard VAT rate in India in 2022 is 18%.
The cumulative GST rate in India depends on the good code and differs from 0 to 28%.
Here you can see several examples of cumulative VAT (IGST) rates:
- CGST – Central Goods and Services collected by the central government and applicable on transactions intra-state i.e. within a state.
- SGST – State Goods and Services Tax collected by the respective state government and applicable only on the transactions that are intra state i.e. within the state.
- IGST – Integrated Goods and Services Tax collected by the central government and applicable when goods or services are being supplied from one state to another state and also on imports.
- UTGST (or UGST) – Union Territory Goods and Services Tax collected by the Union Territory government only and applicable in all the Union Territories of India. It taxes transactions within 1 Union Territory only.
The following rates apply to goods in India.
- 0% – some food such as milk, fresh fish, and vegetables;
- 5% – some food and goods such as apparel, footwear, vital medicines, and coal;
- 12% – most goods such as phones and processed foods (cheese, frozen meat);
- 18% – scented candles, water heaters, detergents;
- 28% – “luxury” goods, for example, cars, yachts, aircraft, and casinos fall under this category.
As can be seen from the examples given, in India it is difficult to immediately determine the rate applied to a particular product, therefore it is necessary to treat this issue with great attention.