GST: Goods and service tax in Other countries.
India is being taken over by the goods and service tax on an alarming rate. This ‘One nation one tax’ philosophy will unite the citizens of India, under one roof. This will make all the business of India more competitive globally. France was the first country to introduce the goods and service tax in 1954. The reason behind the implementation of Goods & Service Tax was to reduce tax evasion. Then in the year 1994 China implemented it, followed by Russia in 1991. Saudi Arabia is going to implement it in 2018. In short more than 140 countries have implemented GST. Some countries like Brazil and Canada have dual GST. The model India has chosen is the Canadian model of dual GST.
In this Canadian model of GST, there are basically three components. CGST (Central goods and service tax) in which the tax will be collected by the central government, SGST (State goods and service tax) in which the tax will be collected by the state government and IGST (Inter-state goods and service tax) in which the central government will collect the tax on the interstate transactions of goods and services. Under this GST rule, all the goods and services will be taxed at the rates of 0%, 5%, 12%, 18% and 28%. Also the following taxes are included in the GST Value added tax (VAT), Central sales tax (CST), entertainment tax, service tax, luxury tax, food tax etc.
|Country||Corporate tax||Income tax (min)||Income tax (max)||VAT or GST|
|Australia||28.5 or 30%||0%||49%||0%(Essential items) 10% (others)|
|Belgium||33.99%||0%||64% (max of federal- local), 0% (local)||12%-21% (restaurants), 6% (essential and selected goods)|
|Canada||15% + 11-16% provincial.||15% + 4-11% provincial.||33% + 11.5% to 21%||5% (federal GST) + 5% – 15% (provincial tax)|
|China||25%||0%||45%||17% with many exceptions.|
|Iceland||20%||0%||46%||12 to 24%|
|India||30%||0%||34.6%||GST from 0% to 28%.|
|Malaysia||25%||0%||26%||6% from GST|
|Nepal||20%||15%, 1% Social Security Tax Mandatory||25%||13%|
|United Kingdom||19%||0%, 20% (personal allowance of 11,000 for most allowance)||45% (on income over 150,000)||20% standard rate, 5% reduced rate for home energy and renovations. 0% Zero Rate for life necessities – groceries, water, prescription medications, medical equipment|
|United States of America||35% – 0%-12% (state/local)||0% (federal) + 0% (state) + 0 to 3% (local)||39.6 – 52.9% =
+ 0 – 13.3% (state)
|0%-11.725% (state and local)|
America doesn’t have a GST as it ensures high autonomy for all its states. All the models across the states of the commonwealth are the same. There are just some variations. All the other countries have a high threshold for GST than India. Thus all the small businesses are flourished in other countries. From July 1 the new GST Model will be implemented.