GST in India vs GST in other countries – how India differs |(FAQs)

Goods and Services Tax (GST) is a value-added tax system introduced in India on July 1, 2017. The new tax system has replaced multiple taxes such as Service Tax, Value Added Tax (VAT), Central Excise Duty, and other state and central taxes. GST is an indirect tax and it is applicable on the supply of goods and services in India. The GST system is based on the Canadian model of taxation, which is a destination-based tax system.

In this article, we will discuss how the GST system in India differs from GST systems in other countries. We will also try to answer some frequently asked questions about GST in India.

How does GST in India differ from GST in other countries?

There are several differences between the GST system in India and other countries:

1. GST Rates:

The GST rates in India are divided into four categories, i.e., 5%, 12%, 18% and 28%. However, in other countries, such as Australia, there is a single rate of 10%.

2. GST Exemptions:

In India, there are exemptions for some goods and services, such as healthcare and education. In other countries, such as Singapore, there are no exemptions for any goods and services.

3. GST Registration Threshold:

In India, businesses with a turnover of more than Rs. 20 lakhs are required to register for GST. However, in other countries, such as Canada, businesses with a turnover of CAD 30,000 or more are required to register for GST.

4. Input Tax Credit:

In India, businesses can claim input tax credit for GST paid on purchases of goods and services. However, in other countries, such as Canada, businesses are not allowed to claim input tax credit for GST paid on purchases of goods and services.

These are some of the differences between the GST system in India and other countries. Now let’s move on to some frequently asked questions about GST in India.

Frequently Asked Questions (FAQs)

1. What is GST?

GST is a value-added tax system that is applicable on the supply of goods and services in India. It is an indirect tax that has replaced multiple taxes such as Service Tax, Value Added Tax (VAT), Central Excise Duty, and other state and central taxes.

2. What are the benefits of GST?

The benefits of GST include:

Reduction in the overall tax burden on goods and services
Elimination of cascading effect of taxes
Uniformity in tax rates and procedures across the country
Improved compliance and ease of doing business

3. Who is liable to pay GST?

Any person or business that is involved in the supply of goods and services is liable to pay GST. The liability to pay GST is on the supplier of goods and services.

4. What is the GST registration process?

The GST registration process involves the following steps:

Visit the GST portal and click on ‘New Registration’
Fill in the necessary details such as PAN, mobile number, email address, etc.
Enter the OTP received on the registered mobile number and email address
Fill in the remaining details such as business details, bank details, etc.

5. What are the GST rates in India?

The GST rates in India are divided into four categories, i.e., 5%, 12%, 18% and 28%. Some goods and services are exempt from GST.

6. What is the GST return filing process?

The GST return filing process involves the following steps:

Log in to the GST portal and select the relevant return form
Fill in the necessary details such as outward supplies, inward supplies, tax liability, etc.
Verify the details and submit the return

7. What are the documents required for GST registration?

The documents required for GST registration include:

PAN card
Proof of business registration
Proof of place of business
Bank account details
Authorized signatory details

These are some of the frequently asked questions about GST in India. If you have any more questions, you can refer to the GST portal or consult a tax expert.

Conclusion

The GST system in India has brought about significant changes in the taxation system of the country. The system has been introduced to make the tax system more transparent, efficient and easy to comply with. Although there are some differences between the GST system in India and other countries, the overall objective of the system remains the same – to provide a unified tax system that is easy to comply with and reduces the tax burden on businesses and consumers.