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GST in other countries

Tax Ambit Aug 22 ,2017

Moderate taxes, high evasions cannot co exist –Arun Jaitley

Goods and Services Tax- popularly known by its acronym-GST, has been a topic of much contemplation, rave and rant. It’s a common transactional tax levied all over the globe. Canada has a federal government similar to India. A federal GST was introduced there in 1991. This step was taken in order to replace the existing federal sales tax at a general rate of 13.5%. In spite of this, the provinces continued with the Provincial Retail Tax (PST). This meant that there were two types of taxes. However, Harmonised Sales Tax (HST) was imposed on the states that have harmonized their provincial sales tax with GST. In the rest of the provinces, GST is incurred on taxable goods and services along with provincial sales tax or a retail sales tax. Brazil too has a multiple rate system.Furthermore, existing complexities relating to work contracts, software and intellectual property would be done away with. Consequentially taxation of such transactions would be rendered simpler and reduce the overall burden of unnecessary taxation.

This indicates that GST was crucial in bringing a sea change in economy globally.

India: Benefits of GST

Back home, the need of GST was as dire as the lack of it had spread a lot of discontent arising out of helplessness among the taxpayers. GST would bring about tax neutrality and this would prevent the undue increase in the rates of goods and services. Besides, since GST is a simpler and uniform way of taxation; it’s more conducive to laissez faire. Moreover, it would encourage foreign countries to set up their manufacturing units in India and boost Indian economy.

To sum up, GST is the sure shot way to end the plight of the overburdened and irate tax payer and make Indian economy healthier than ever!

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