How can foreign companies expand into India without setting up a subsidiary?

Foreign companies can expand into India using an Employer of Record (EOR) model which handles payroll, compliance, and regulatory requirements.

What is the most efficient way to enter the Indian market?

Companies can enter India through a subsidiary, EOR model, or GCC setup depending on speed, cost, and long-term strategy.

What are key compliance requirements for foreign companies in India?

Key requirements include GST registration, corporate tax compliance, transfer pricing documentation, and adherence to FEMA and RBI regulations.

What is a Global Capability Center (GCC) in India?

A GCC is a captive offshore unit that supports global operations such as finance, IT, and analytics with cost efficiency and scalability.

How can profits be repatriated from India?

Profits can be repatriated via dividends, royalties, or intercompany transactions subject to tax and FEMA regulations.

GST 2.0 A new beginning

GST Customs and Indirect Tax — Overview

GST Customs and Indirect Tax
Sep 15, 2025

GST 2.0 A NEW BEGINNING

By Nagavarapu Bhavya Akshaya

WHAT IS GST 2.0?

GST 2.0 is a major reform of the Goods & Services Tax in India, approved in the 56th GST Council meeting. It aims to simplify the tax structure, reduce compliance burden, resolve existing anomalies, and lower the tax burden for many goods and services.The changes are effective from 22 September 2025 for most goods and services

Key Changes under GST 2.0

Here are the main reforms: The previous four main tax slabs (5%, 12%, 18%, and 28%) have been condensed into a two-rate system:

5% Merit Rate: For essentials and everyday items.
18% Standard Rate: For most other goods and services.
40% Demerit Rate: For luxury and "sin" goods, such as tobacco, pan masala, and high-end cars.
Widespread rate reductions: Tax rates were lowered on over 300 items to reduce the burden on common consumers and address the "inverted duty structure" that hampered manufacturers.
Enhanced compliance and refunds: The reform includes process improvements to make compliance simpler, including faster and more automated refunds, which particularly benefits small and medium-sized enterprises (MSMEs).
New technology implementation: GST 2.0 uses technology, artificial intelligence, and data analytics to streamline online filing and speed up the tax process.
Operational GST Appellate Tribunal (GSTAT): The tribunal was set to be operational by December 2025 to facilitate faster dispute resolution

What Gets Cheaper vs More Expensive

Likely to get cheaper:

Daily essentials, Household appliances earlier taxed at higher rates (ACs, TVs etc.) moving from 28% to 18%, Agricultural machinery & tools, Medicines and health devices — many moving to 5%, and some lifeâ€saving drugs possibly zero rated.

Likely to get costlier or face higher tax:

Luxury goods, highâ€end vehicles, SUVs, large cc motorcycles, etc. moving into the 40% slab, Sin goods like tobacco, pan masala, etc.

Implications

Consumers: Most people, especially for everyday goods, should see prices fall or remain more stable under the new slabs. For luxury/sin goods, prices will go up due to higher tax.

Business / MSMEs: Simplified tax rates and fewer slabs reduce complexity. Classification disputes (which are legal/time/cost burdens) may reduce. Faster refunds and simpler returns help cash flow.

Government & States: Need to ensure revenue neutrality: that lower rates don’t significantly reduce tax collections, or that consumption increases offset the drop. Also administrative transitions (updates to systems, compliance etc.) required.
Tobacco, pan masala, etc.: The shift to 40% is not immediate while the government completes discharge of the existing compensation cess obligations. So they stay at prior effective rates until then.
Retail Sale Price (RSP) taxation: For some tobacco products, the taxable base will switch to RSP to reduce underâ€‘invoicing/avoidance.
Input tax credit (ITC) rules, service classifications etc. may also be refined under GST 2.0. Cost of compliance, classification, etc. will be a factor. â€‹

Thus to conclude, the GST framework 2.0 reforms are further expected to bring simplification, better matching, and reduced disputes.

For detailed insights and practical guidance, visit our Knowledge Center and access our curated guides on India market entry: https://www.a2consultants.in/guides/international-taxation-in-india-for-foreign-companies

About the Author – Nagavarapu Bhavya Akshaya

Nagavarapu Bhavya Akshaya is a CA Final and CMA Final student and an All India Rank holder (AIR 31). With a strong academic foundation in accounting, taxation, and corporate laws, she brings a structured and analytical perspective to complex financial and regulatory topics. Her work focuses on simplifying technical subjects for professionals and businesses, with a special interest in international taxation, corporate structuring, and compliance advisory.

Need a Structural Review of your business prospects in India? > If you are looking to pounce on the FTA opportunity and looking to review your business prospects . [Contact A2 Consultants for a Private Consultation as we have lot of European clients whom we are aleady helping in their business in India] https://www.a2consultants.in/home/book_slot