India VAT Calculator
How Much Is GST in India?
The standard GST (the local equivalent of VAT) rate in India is 18% in 2026, plus a reduced rate of 5% and a 40% rate on luxury and sin goods (the GST 2.0 slabs from September 2025). It applies to most goods and services sold in India. Standard VAT/GST rates worldwide range from around 5% to 27%.
How to calculate India GST
To add 18% GST to a net (tax-exclusive) price, multiply it by 1.18. To remove GST from a gross (tax-inclusive) price, divide it by 1.18.
- Add GST: INR 100 net × 1.18 = INR 118 gross (that is INR 18 of GST)
- Remove GST: INR 118 gross ÷ 1.18 = INR 100 net (that is INR 18 of GST)
Use the India GST calculator above for any amount, or compare India with every other country in our GST rates by country table.
India VAT Rates Overview
Every VAT rate currently in force in India
Current VAT Rates (2026)
| Rate type | Rate | Applies to |
|---|---|---|
| Standard rate | 18% | Most goods and services, including most services, electronics, small cars and many items moved down from the old 28% slab under GST 2.0 |
| Merit (reduced) rate | 5% | Everyday essentials and items moved down from the old 12% slab, e.g. packaged foods, many household goods, some medicines, economy hotel rooms and restaurant services (without input tax credit) |
| Demerit rate | 40% | Sin and luxury goods: pan masala, cigarettes and tobacco (from 1 Feb 2026), aerated and sugary drinks, larger cars and motorcycles, yachts and private aircraft |
| Special rate | 3% | Gold, silver and jewellery |
| Special rate | 0.25% | Rough and unset precious and semi-precious stones |
| Nil rate / exempt | 0% | Unpacked fresh food, milk and paneer, Indian breads, certain life-saving drugs, individual life and health insurance, educational supplies |
VAT History and Local Rules in India
How the rates got here, and country-specific points to watch
Key VAT milestones
- 2026: GST compensation cess ended on 1 Feb 2026; tobacco and pan masala moved to the 40% GST rate plus separate excise and health cess
- 2025: GST 2.0 from 22 Sept 2025: 12% and 28% slabs largely abolished, leaving 5%, 18% and a 40% demerit rate
- 2020: Mandatory B2B e-invoicing via the Invoice Registration Portal introduced for large taxpayers, later extended downwards
- 2017: GST launched on 1 July 2017, replacing central excise, service tax, state VAT and other indirect taxes
- 2016: 101st Constitutional Amendment Act passed, enabling the GST
- 2005: State-level VAT introduced across most states, replacing state sales taxes
Is the VAT rate the same everywhere in India?
The combined GST rate is the same in every state and union territory. What varies is how it is split: intra-state sales carry CGST plus SGST/UTGST in equal halves, while inter-state sales and imports carry IGST at the full rate. Registration thresholds are lower in the special category (mainly north-eastern and hill) states.
Good to know
GST is a dual tax: on a sale within one state the rate is split equally between central GST (CGST) and state GST (SGST or UTGST), so 18% is charged as 9% + 9%. On a sale between states, or on imports, the full rate is charged as integrated GST (IGST). The total rate is the same either way.
Petroleum crude, petrol, diesel, aviation turbine fuel and natural gas remain outside GST and are taxed through central excise and state VAT, while alcohol for human consumption is also outside GST and taxed by states.
Since 1 Feb 2026 the GST compensation cess has been abolished. Tobacco products now carry 40% GST plus an additional central excise duty, and pan masala a separate Health and National Security Cess, so their total tax is higher than the headline 40%.
Zero-Rated and Exempt Supplies in India
The difference matters: zero-rating keeps input-VAT recovery, exemption does not
Zero-rated supplies (0%)
VAT is charged at 0%, but the seller can still recover input VAT on related costs:
- Exports of goods and services (with or without payment of IGST, refundable)
- Supplies to Special Economic Zone (SEZ) units and developers for authorised operations
VAT-exempt supplies
No VAT is charged, and the seller generally cannot recover input VAT on related costs:
- Fresh unpacked fruit, vegetables, cereals and similar unprocessed food
- Milk, curd, paneer and Indian breads such as roti and chapati
- Healthcare services by clinical establishments and doctors
- Education services by recognised educational institutions
- Residential dwelling rental to unregistered persons
- Individual life and health insurance policies (from 22 Sept 2025)
India VAT Registration & Compliance
Key facts for businesses registering for and reporting VAT in India.
| Local name | Goods and Services Tax (GST): CGST, SGST/UTGST and IGST |
|---|---|
| VAT number format | GSTIN: 15 characters = 2-digit state code + 10-character PAN + entity number + Z + check character (e.g. 27AAPFU0939F1ZV) |
| Registration threshold | Aggregate turnover of INR 40 lakh for suppliers of goods (INR 20 lakh in special category states) and INR 20 lakh for service providers (INR 10 lakh in special category states) |
| Non-resident businesses | Non-resident taxable persons must register before making any taxable supply in India (no threshold); foreign providers of online (OIDAR) services to Indian consumers must register regardless of turnover |
| Filing frequency | Monthly GSTR-3B summary return and GSTR-1 outward supplies return; small taxpayers (turnover up to INR 5 crore) may opt for quarterly returns with monthly payment (QRMP); annual return GSTR-9 |
| Filing and payment deadline | GSTR-1 by the 11th and GSTR-3B by the 20th of the following month (QRMP: GSTR-3B by the 22nd or 24th after the quarter depending on state); GSTR-9 by 31 December after the financial year |
| E-invoicing / reporting | B2B e-invoicing through the Invoice Registration Portal is mandatory for businesses with aggregate annual turnover above INR 5 crore; e-way bills are required for movement of goods above INR 50,000 |
| Tax authority | Central Board of Indirect Taxes and Customs (CBIC) / GST Network portal |
Thresholds, deadlines and e-invoicing rules are revised regularly. Always confirm current requirements with Central Board of Indirect Taxes and Customs (CBIC) / GST Network portal before relying on them.
Cross-Border Sales and Refunds in India
Selling into the country from abroad, and getting VAT back
Cross-border rules
Digital services and e-commerce: Foreign suppliers of online information and database access or retrieval (OIDAR) services to Indian consumers must register under a simplified scheme and charge 18% IGST from the first rupee; B2B supplies are taxed under reverse charge by the recipient.
Tourist VAT refunds: The GST law provides for refunds of IGST to foreign tourists on goods taken out of India, but no operational tourist refund scheme is in place.
For the general rules, see the reverse charge mechanism, VAT on digital services, VAT invoice requirements and VAT refunds for tourists and businesses.
Compare VAT Rates
VAT rates in neighboring and similar economies
Nearby Countries
🇦🇺 Australia
Standard Rate: 10%
🇳🇿 New Zealand
Standard Rate: 15%
🇯🇵 Japan
Standard Rate: 10%
🇰🇷 South Korea
Standard Rate: 10%
Frequently Asked Questions
Common questions about VAT in India
What is the current VAT rate in India?
The standard VAT rate in India is 18% in 2026. Other rates in force: 5% (merit (reduced) rate), 40% (demerit rate), 3% (special rate), 0.25% (special rate), 0% (nil rate / exempt). See the rates table above for exactly what each rate covers.
How do I calculate VAT in India?
To add 18% VAT, multiply the net price by 1.18. To remove it from a VAT-inclusive price, divide by 1.18; the difference is the VAT. The calculator at the top of this page does both.
What are the GST slabs in India after GST 2.0?
From 22 September 2025 India moved to two main rates, 5% and 18%, plus a 40% demerit rate on sin and luxury goods. Special rates of 3% (gold and jewellery) and 0.25% (rough precious stones) remain, and many essentials are nil-rated.
What is the difference between CGST, SGST and IGST?
For a sale within a state, GST is split equally into central GST and state GST, e.g. 9% + 9% on an 18% item. For a sale between states or an import, the full 18% is charged as integrated GST. The buyer pays the same total rate.
When is GST registration mandatory in India?
Registration is required once aggregate turnover exceeds INR 40 lakh for goods suppliers or INR 20 lakh for service providers (lower limits in special category states). Inter-state suppliers of goods, e-commerce sellers in many cases and non-resident suppliers must register regardless of turnover.
Sources
Official and professional references used for this page
Last reviewed on 27 September 2026.