7/7/2017 GST in other Countries compared to GST in India - Cleartax's Analysis

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Home (/) / GST (/gst) / GST Analysis and Opinions (/s/gst-analysis-and-opinions) / GST in India vs GST in other countries how India differs

GST in India vs GST in other countries how India differs

Updated on Jun 09, 2017 - 07:37:05 PM

Goods and service tax is taking India by the storm. GST will bring in One nation one tax to unite indirect taxes under one umbrella and facilitate Indian businesses to
be globally competitive. The Indian GST case is structured for efficient tax collection, reduction in corruption, easy inter-state movement of goods etc.

France was the first country to implement GST to reduce tax- evasion. Since then, more than 140 countries have implemented GST with some countries having Dual-
GST (e.g. Brazil, Canada etc.) model. India has chosen the Canadian model of dual GST.

GST in India vs GST in other countries

How Indian GST model compares with GST in other countries

Particulars India (proposed) Canada UK

Name of GST in Goods and Service tax Federal Goods and Service Tax & Harmonized Value Added Tax
the country Sales Tax

Standard Rate 0% (for food staples), 5%, 12%, 18% and 28% GST 5% and HST varies from 0% to 15% 20 %
(+cess for luxury items) Reduced rates- 5 %, exempt, zero
rated

Threshold 20 lakhs (10 lakhs for NE states) Canadian $ 30,000 (Approx Rs. 15.6 lakhs in 73,000
exemption INR) (Approx Rs. 61.32 lakhs)
Limit

Liability arises on Accrual basis: Issue of invoice OR Accrual basis: The date of issue of invoice OR Accrual Basis: Invoice OR Payment
Receipt of payment the date of receipt OR Supply
-earlier of payment- earlier. -earliest
Cash basis (T/O upto 1.35mn):
Payment

Returns and Monthly and 1 annual return Monthly, quarterly or annually based on Usually quarterly. Small business
payments turnover option- annual

Reverse charge Apply on goods (new) as well as services Reverse charge applies to importation of Applicable
Mechanism (currently under Service tax) services and
intangible properties.

Exempt services Manufacture of Real estate, Financial Services, Medical, Education, Finance,
exempted goods or Provision of exempted Rent (Residence), Charities, Health, Insurance, Postal services
services (to be notified) Education

Particulars India (proposed) Singapore Malaysia

Name of GST in Goods and Service tax Goods and Service Tax Goods And Services Tax
the country

Standard Rate 0% (for food staples), 5%, 12%, 18% and 7% Reduced rates- Zero rated, exempt 6%
28%(+cess for luxury items)

Threshold 20 lakhs (10 lakhs for NE states) Singapore $ 1 million MYR 500,000
exemption (Approx Rs. 4.8 crore) (Approx Rs. 75 lakhs)
Limit

Liability arises Accrual basis: Issue of invoice OR Accrual Basis: Issue of invoice OR Receipt of Accrual Basis: Delivery of goods OR Issue of
on Receipt of payment payment OR Supply - earliest invoice OR Receipt of payment
-earlier Cash basis:(T/O upto SGD$1mn): Payment

Returns and Monthly and 1 annual return Usually quarterly Business option- Monthly Large organsations- Monthly
payments returns.

Reverse charge Apply on goods (new) as well as services Reverse charge applies to supply of services Reverse charge applies to imported services
Mechanism (currently under Service tax)

Exempt services Manufacture of Real estate, Financial services, Residential Basic food,Health Transportation, Residential
exempted goods or Provision of exempted rental property, Agricultural land
services (to be notified)

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7/7/2017 GST in other Countries compared to GST in India - Cleartax's Analysis

**USA does not have GST as it ensures high autonomy for the states**

Thus we find GST model across the commonwealth countries are similar with some variations. Unlike India, other countries have a much higher threshold for GST
applicability thus reducing the burden for small businesses. This will bring in challenges for our SMEs.

Earlier countries implemented GST and faced many problems post-implementation. Read here (https://cleartax.in/s/post-implementation-gst/)to find out more.

Are you worried about how GST will impact your business? Register (https://cleartax.in/gst?ref=header_gst) with us at Clear Tax to keep yourself up to date on GST.
We also have experts to help you to smoothly transit to GST.

An edited version of this article has been published in Business Insider (http://www.businessinsider.in/gst-to-be-rolled-out-by-july-1-this-is-how-it-will-be-different-from-
uk-canada-other-countries/articleshow/57392589.cms).

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