Goods and service tax is taking India by the storm. GST will bring in & One nation one tax & to unite roundabout taxes under one umbrella and facilitate Indian businesses to be globally competitive. The Indian GST circumstance is structured for effective tax collection, reduction in corruption, the easy inter-state activity of goods and so forth.
How is India’s GST Different?
When compared to other emerging markets, India & maximum rate of GST stands at 28%, which is the highest.
Most of the commodities in China and Brazil fall under 17%, 10% tax rate respectively. On the other hand developed economies such as France, Germany and United Kingdom have higher GST rates set between 19% to 20%. Latest data by Economic Co-operation and Development showed that average VAT/GST rate in major OECD countries is between 20-22% higher than the rate proposed for India.
Comparing GST of India with Other Countries Canada–The Goods and services tax here is also known as Federal Goods and services tax. The threshold exemption limit which is 20 lakhs for India is approximately 15 lakhs for Canadians. The returns and payments in case of Canada can be monthly, quarterly or even annually based on the turnover.
Singapore – The reduced rate for Singapore is 7 %. The threshold exemption limit is about 4.8 crores. The returns are usually based on monthly or quarterly. The reverse charges are usually applicable for the supply of services. In this case for India, the reverse charges are applicable for both goods and services. The exemptions allowed in such cases are a Real estate, financial services and rental.
Malaysia – The standard rate for goods and services tax in Malaysia is 6 %. The threshold exemption limit is about 75 lakhs. The accrual basics usually involve delivery of goods or services, issue of invoice or receipt of payment. The returns in case of large organizations occur on a monthly basis. The reverse charges are only applicable on imported services. Finally, the exemption services are for basic food, health, transportation, property and
agricultural land.
USA- This country does not have a GST because of its high level of autonomy.
UK – In case of UK this tax is known as a value-added tax. The standard rates are 20 %, 5 % and exemption cost are zero. The service for which exemption is viable is Medical, Education, Finance, Insurance, Postal services. As a result, we find GST model throughout the Commonwealth countries is similar which includes some variations. Contrary to India, other countries have a much higher limit for GST applicability thus reducing the burden on small
businesses. This will bring in challenges for our SMEs.
How is India’s GST Different?
When compared to other emerging markets, India & maximum rate of GST stands at 28%, which is the highest.
Most of the commodities in China and Brazil fall under 17%, 10% tax rate respectively. On the other hand developed economies such as France, Germany and United Kingdom have higher GST rates set between 19% to 20%. Latest data by Economic Co-operation and Development showed that average VAT/GST rate in major OECD countries is between 20-22% higher than the rate proposed for India.
Comparing GST of India with Other Countries Canada–The Goods and services tax here is also known as Federal Goods and services tax. The threshold exemption limit which is 20 lakhs for India is approximately 15 lakhs for Canadians. The returns and payments in case of Canada can be monthly, quarterly or even annually based on the turnover.
Singapore – The reduced rate for Singapore is 7 %. The threshold exemption limit is about 4.8 crores. The returns are usually based on monthly or quarterly. The reverse charges are usually applicable for the supply of services. In this case for India, the reverse charges are applicable for both goods and services. The exemptions allowed in such cases are a Real estate, financial services and rental.
Malaysia – The standard rate for goods and services tax in Malaysia is 6 %. The threshold exemption limit is about 75 lakhs. The accrual basics usually involve delivery of goods or services, issue of invoice or receipt of payment. The returns in case of large organizations occur on a monthly basis. The reverse charges are only applicable on imported services. Finally, the exemption services are for basic food, health, transportation, property and
agricultural land.
USA- This country does not have a GST because of its high level of autonomy.
UK – In case of UK this tax is known as a value-added tax. The standard rates are 20 %, 5 % and exemption cost are zero. The service for which exemption is viable is Medical, Education, Finance, Insurance, Postal services. As a result, we find GST model throughout the Commonwealth countries is similar which includes some variations. Contrary to India, other countries have a much higher limit for GST applicability thus reducing the burden on small
businesses. This will bring in challenges for our SMEs.
We are a unit committed to simplify taxes for small business hub owners in India. Since GST is meant to exchange varied indirect taxes, we have a tendency to begin this series with commonly asked questions on GST.
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