The Modi government implemented Goods and Services Tax (GST) from July 1, 2017, despite stiff resistance from the opposition parties. The purpose of implementing GST was to replace multiple taxes which were charged by both the central government and state governments with one single tax. It also aimed at making tax-regime easy to understand and reduce the functional formalities.
GST has four slabs – 5%, 12%, 18% and 28% and all goods and services are taxed under one of these slabs. However there are some exceptions too, such as petroleum products which are kept out of the scope of GST.
The central government was criticised a lot for implementing GST in one phase and without proper preparation. It was also slammed for increasing the tax slab of many products and services which were used to tax at less rate earlier. The criticism did make an effect on the government and tax rates of 200 items were reduced. Not only this, GST rates for restaurants were also reduced other than the starred hotels.
GST has been implemented in other nations of the world too but India has the highest tax rate. Let us take a look at the GST rates of other nations:
1. France
The tax rates of GST in France since 1954 are 2.1%, 5.5%, 10% and 20%.
2. New Zealand
The rate of GST in New Zealand was 10% since 1986 but in 2010, it was increased to 15%.
3. Australia
Taxes were implemented in Australia in the year 2000 at 10%.
4. Singapore
3% was the tax rate when it was implemented in 1994 but it was changed to 7% in 2007.
5. Malaysia
GST has been implemented in 2015 in Malaysia at 6%.
6. Canada
A majority of products and services are taxed at 5% while in some provinces, 15% is also charged.
7. United Kingdom
The rate of VAT is 20% in UK since 2011.
8. Ukraine
There are 2 slabs of VAT in Ukraine; majority of the goods and services come under 20% tax slab while for few items including medicines, it is 7%.
9. Vietnam
The tax slabs of VAT in Vietnam are 0, 5% and 10% for most of the goods and services.
10. Pakistan
GST rate in Pakistan is 17% since 13 June, 2013, and before that, it was 16%.