Goods and Service Tax (GST) is a comprehensive tax levy on manufacture, sale and consumption of goods and service at a national level under which no distinction is made between goods and services for levying of tax.
GST will be levied on all transactions such as sale, transfer, purchase, barter, lease, or import of goods and/or services
It will mostly substitute all indirect taxes levied on goods and services by the Central and State governments in India.When GST (goods or services tax) rolls out on 1 July 2017, it will be the biggest tax reform since Independence. GST will subsume a large number of central and state taxes into a single tax, paving the way for a common national market.
The Goods and Service Tax or GST which is how it is popularly called world over, was first introduced in France in the year 1954. It was consequently after France that countries like Japan, South Korea, UK and Australia implemented the GST law.
There are around 160 countries in the world that have GST in place. GST is a destination based taxed where the tax is paid by the consumer.
GST will be levied on all transactions such as sale, transfer, purchase, barter, lease, or import of goods and/or services
It will mostly substitute all indirect taxes levied on goods and services by the Central and State governments in India.When GST (goods or services tax) rolls out on 1 July 2017, it will be the biggest tax reform since Independence. GST will subsume a large number of central and state taxes into a single tax, paving the way for a common national market.
Some of the following taxes will be bound together by the GST:
- Central Excise Duty
- Commercial Tax
- Value Added Tax (VAT)
- Food Tax
- Central Sales Tax (CST)
- Octroi
- Entertainment Tax
- Entry Tax
- Purchase Tax
- Luxury Tax
- Advertisement tax
There are around 160 countries in the world that have GST in place. GST is a destination based taxed where the tax is paid by the consumer.
Most of the countries have a unified GST system but India is going to adopted the Dual GST model, the first was Canada who adopt dual gst model. It can be easily understand with the help of following diagram.
The most crucial aspect of this tax regime is the rate of GST that prevails on the various categories of products.
Under GST, goods and services will be taxed at the following rates,
- 0%,
- 5%,
- 12%,
- 18%,
- 28%.
GST rates of some countries are given below:-
| Country | Rate of GST |
| Australia | 10% |
| France | 19.6% |
| Canada | 5% |
| Germany | 19% |
| Japan | 5% |
| Singapore | 7% |
| New Zealand | 15% |
To be continue.....
