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India Tax System Poised to Get More Complicated for Businesses

June 22, 2022, 1:30 AM

Indian Prime Minister Narendra Modi’s much-touted Goods and Services Tax—which revamped the country’s system of indirect taxes—is about to get more difficult for businesses to navigate as it enters its sixth year July 1.

Although billed as India’s biggest tax reform since national independence in 1947, the GST system poses new—along with continuing—challenges for companies on multiple fronts including compliance, procedure, and on policy, according to industry groups and practitioners.

For example, tax rates on products are still confusing—milk is taxed at 5%, while beverages that contain milk are taxed at 12%.

“Further simplification of compliances and tweaking of the ...