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India 3 GST rates simplification 2022?

India’s Goods and Services Tax Council is reviewing simplifying the number of GST rates from four to three in 2022. This would likely mean the withdrawal of the current secondary main rate of 12%. Discussions are set to take place this December.

Four GST rates into three by next year?

The current rates are:

  • 28% – vehicles; fizzy drinks; air conditioners; nightclub entrance; luxury hotels and restaurants, and gambling
  • 18% main rate applying to over 450 defined goods and services, including luxury restaurants and hotels
  • 12% second main rate applying to over 250 defined goods and services including other hotels and restaurants; non-dwelling construction
  • 5% – passenger air travel; construction of dwellings; restaurants

There are also a precious stones (0.25%) and metals (3%) rates. Sign-up for VAT Calc’s FREE global VAT and GST news e-mail updates.

This is likely to be cut to three rates, as follows:

  • 28% luxuries
  • 18% main rate
  • 5% reduced rate

The disruption caused by COVID-19 prevented an earlier consolidation. India implemented GST in 2017, and it just hit its fourth anniversary. There are also discussions to bring fuel into the GST net.


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