How Indian GST model compares with GST in other countries
|
Particulars |
India (proposed) | Canada |
UK |
| Name of GST in the country | Goods and Service tax | Federal Goods and Service Tax & Harmonized Sales Tax | Value Added Tax |
| Standard Rate | 0% (for food staples), 5%, 12%, 18% and 28%(+cess for luxury items) | GST 5% and HST varies from 0% to 15% | 20 % Reduced rates- 5 %, exempt, zero rated |
| Threshold exemption Limit |
20 lakhs (10 lakhs for NE states) | Canadian $ 30,000 (Approx Rs. 15.6 lakhs in INR) | £ 73,000 (Approx Rs. 61.32 lakhs) |
| Liability arises on | Accrual basis: Issue of invoice OR Receipt of payment -earlier |
Accrual basis: The date of issue of invoice OR the date of receipt of payment- earlier. |
Accrual Basis: Invoice OR Payment OR Supply -earliest Cash basis (T/O upto 1.35mn): Payment |
| Returns and payments |
Monthly and 1 annual return | Monthly, quarterly or annually based on turnover | Usually quarterly. Small business option- annual |
| Reverse charge Mechanism |
Apply on goods (new) as well as services (currently under Service tax) | Reverse charge applies to importation of services and intangible properties. |
Applicable |
| Exempt services | Manufacture of exempted goods or Provision of exempted services (to be notified) |
Real estate, Financial Services, Rent (Residence), Charities, Health, Education |
Medical, Education, Finance, Insurance, Postal services |
| Particulars | India (proposed) | Singapore | Malaysia |
| Name of GST in the country | Goods and Service tax | Goods and Service Tax | Goods And Services Tax |
| Standard Rate | 0% (for food staples), 5%, 12%, 18% and 28%(+cess for luxury items) | 7% Reduced rates- Zero rated, exempt | 6% |
| Threshold exemption Limit |
20 lakhs (10 lakhs for NE states) | Singapore $ 1 million (Approx Rs. 4.8 crore) |
MYR 500,000 (Approx Rs. 75 lakhs) |
| Liability arises on | Accrual basis: Issue of invoice OR Receipt of payment -earlier |
Accrual Basis: Issue of invoice OR Receipt of payment OR Supply – earliest Cash basis:(T/O upto SGD$1mn): Payment |
Accrual Basis: Delivery of goods OR Issue of invoice OR Receipt of payment |
| Returns and payments |
Monthly and 1 annual return | Usually quarterly Business option- Monthly returns. |
Large organsations- Monthly |
| Reverse charge Mechanism |
Apply on goods (new) as well as services (currently under Service tax) | Reverse charge applies to supply of services | Reverse charge applies to imported services |
| Exempt services | Manufacture of exempted goods or Provision of exempted services (to be notified) |
Real estate, Financial services, Residential rental | Basic food,Health Transportation, Residential property, Agricultural land |
**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.
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