GST, also known as good and service tax, is a comprehensive tax system that came into effect on 1st July 2017 and abolished many previous existing taxes, such as service tax, central excise duties, etc. The goods and service tax is an indirect tax levied on goods and services. The burden of paying the tax is on the final consumer. It is a comprehensive, multi-stage, destination-based tax system that is levied on every value addition. GST is a single indirect tax for the entire country.
The first country to implement GST was France. After this, around 160 countries around the world implemented the same. Some countries even have dual GST models e.g.:- Brazil, Canada, and India.
One of the major differences between GST in India and GST in other countries is that GST in India is charged under two government authorities, central and state, as India is a federal country. Both central and state governments are charged with the authority of collecting taxes at various levels. In GST India, the three important taxes under the regime are as follows:-
The tax is collected by the state government on an intra-state basis.
The tax is collected by the state government on an intra-state basis.
The tax is collected by the central government on an interstate basis.
Countries
Applicable GST rates
Australia
10%
Brazil
10%
Canada
5%
China
17%
France
20%
Germany
19%
India
18%
Indonesia
10%
Japan
8%
Korea
10%
Malaysia
6%
Mexico
16%
Netherlands
21%
New Zealand
15%
Pakistan
17%
Russia
18%
Singapore
7%
Switzerland
8%
Thailand
7%
United Kingdom
20%
Particulars
India
Canada
United kingdom
Singapore
Name of the GST
Goods and service tax
Federal Goods and Service Tax % Harmonized Sales Tax
Value added tax
Goods and service tax
Standard rate
0%- food items
5%, 12%, 18% and 28%+cess- for luxury items
GST- 5%
HST- 0% to 15%
20% reduced rates- 5%, exempt, zero-rated
7% reduced rates- zero rated, exempt
Threshold exemption limit
20 lakhs and 10 lakhs for north eastern region
Canadian $30,000 which is approx. equal to 15.6lakh
Approximately 61.32 lakh
Approximately 4.8 crores
Liability arises on
Issue of invoice or receipt of payment- whichever is earlier
(Accrual basis)
The date of issue of invoice or date of receipt of payment – whichever is earlier
(Accrual basis)
Invoice or payment or supply- earliest cash basis- payment
(Accrual basis)
Delivery of goods or use of invoice or receipt of payment
(Accrual basis)
Monthly and one annual return
Monthly, quarterly or annually based on the turnover
Usually quarterly, small business option- annual
Usually quarterly business option- monthly returns
Reverse charge mechanisms
Applied on goods or services
Reverse charge mechanisms applies to importation of services and intangible services
Applicable
Reverse charge applies to the supply of services
Exempt services
Manufacturer of exempted goods or provision of exempted services
Real estate, financial services, rent, charities, health education
Real estate, financial services or residential rental
Basic food, transportation, health, residential property, agricultural land
In every case, GST is charged somewhere between 5% and 20%, India has taken influence over this and put in a similar pattern of tax rates. Also, the expected Indian Economy growth with the GDP has a great pace as the speculated taxpayer community is likely to get a growth of 5 to 6 times than the current economy in the coming years.
As of 2018, 166 out of 193 countries under the United Nations had implemented a VAT (or GST) system. This number includes all OECD members except the United States, where many of the states use a sales tax system instead
Transactions done within a state are subject to a central GST (CGST) levy as well as a state GST (SGST) levy by the Central and state governments, respectively. Interstate transactions attract integrated GST (IGST) levied by the Central Government.
Goods/sectors which are out of the purview of GST are alcohol and specified petroleum products like petroleum crude, high-speed diesel, motor spirit, aviation turbine fuel, and natural gas.
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