Indirect Taxes
Sales Tax / GST — Overview
| Aspect | 2017 — Sales Tax | 2022 — GST |
|---|---|---|
| Tax name | Sales Tax | Goods and Services Tax (GST) |
| Status | In force | GST passed 2020; planned to take effect mid-2022, replacing the existing sales tax system |
| Rate structure | 9 ad-valorem + 2 specific tax slabs; 0%–100% (narrow base) | Single standard rate of 7% (broad base) |
| Scope | Goods entering the country + limited domestic services (entertainment, hotels). Only 6 types of goods/services subject at point of sale. ~37% of total imports at 0% rate. | Broader base; fewer exemptions than 2017 sales tax system |
| Exemptions | ~37% of total imports exempt (0% rate); limited domestic goods | Essential foods (rice, seeds, oils, salt), agriculture inputs, gifts/donations to charities — see rate table below |
GST Rates & Exemptions by Category — Table A.3 (2022)
| Consumption Category | Rate | Exempt? |
|---|---|---|
| General | 7% | No |
| Essential food items: rice, vegetable seeds, mustard oil, sunflower oil, salt | 0% | Yes |
| Essential food items: fresh dairy products (milk, cheese, butter, curd), egg | 7% | No |
| Agriculture inputs | 0% | Yes |
| Transport by road | 7% | No |
| Postal services | 7% | No |
| Religious services | 7% | No |
| Gifts and donations to charities | 0% | Yes |
Sales Tax Rates for Select Items — Table A.1 (2017)
| Consumption Category | Sales Tax Rate (%) |
|---|---|
| Alcohol | 100% |
| Juice | 30% |
| Fuel and lubricants for personal transport (petrol, diesel, etc.) | 5% |
| Spare parts and accessories for personal transport | 5% |
| Telecom services | 5% |
| Glass and crystalware (drinking glass) | 5% |
| Electrical and parts thereof, sound recorders and reproducers | 5% |
| Boilers and parts thereof, lighting and heating | 5% |
| Articles of iron or steel | 5% |