How India’s GST stacks up against other countries

GST Section and Rules

New Delhi: Nearly four months since its introduction, the Goods and Services Tax (GST) threw up teething troubles and compliance issues, which the GST Council – the highest decision-making body of the new regime – has addressed through several rounds of changes. GST, described as one of the biggest tax reforms in the history of India, has replaced the multiple taxes levied by the central and state governments and has subsumed all the indirect taxes.

Some rejig in the rate structure of the GST is required to reduce the burden on small and medium businesses, Revenue Secretary Hasmukh Adhia has said.

France was the first country to implement GST to reduce tax-evasion. Since then, around 160 countries have implemented GST with some countries having Dual-GST, for example Brazil and Canada.

India has chosen the Canadian model of dual GST as it has a federal structure where the Centre and states have the powers to levy and collect taxes.

The government has categorised items in five major slabs – 0 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent.  Moreover, with the highest rate in the five slabs being at 28 per cent, India easily has the highest GST rate in the world. Compared to India, even European countries like Denmark and Germany, where the standard of living is much higher, have lower tax rates.

Here’s how Indian GST stacks up against other countries:

New Zealand

The GST was introduced in 1986 at a rate of 10 per cent. GST is a tax of 15 per cent on all goods, services and other items sold or consumed in New Zealand.

You become liable to pay GST when your annual turnover exceeds NZ$60,000 in any 12-month period.

Depending on your turnover, you can elect to file returns monthly, two-monthly or six-monthly. GST is a tax of 15 per cent on all goods, services and other items sold or consumed in New Zealand.

This led to adoption of GST at single rate with food included in the GST base at the full rate. At present, the country is highest tax productive nations among OECD countries.


GST is a broad-based consumption tax. It was introduced on 1 July 2000 and replaced a wholesale sales tax.

The GST rate is set at 10 per cent of the price of the goods being sold or services being supplied, where GST is applicable.

Some transactions are outside the scope of GST, for example, gifts made by people who are unregistered or have no connection with Australia.


Like Canada, Brazil also follows Dual-GST system. The federal tax imposed by Centre vary not significantly — 17 per cent in Sao Paulo to 18 per cent in Rio de Janerio.


China’s Value Added Tax (VAT) simplified many conflicting tax systems and is clocked at 17 per cent, besides other taxes.


The only major economy that does not have GST. States enjoy high autonomy in taxation.


Malaysia implemented GST in 2015. It fixed the rate at six per cent. After the implementation, consumer confidence dipped, inflation went up and anti-GST protests occurred across cities.


Thailand keeps its GST at 7 per cent besides its other taxes.


Russian GST is levied at 18 per cent.


GST was first introduced on 1 April 1994 at 3 per cent. The GST rate was increased to 4 per cent in 2003 and to 5 per cent in 2004.

On 15 February 2007 (Budget Day), second Finance Minister Tharman Shanmugaratnam announced that the GST rate would be increased to 7 per cent with effect from 1 July 2007.

Also, Singapore introduced a compensation scheme under the GST which provided support to the needy and underprivileged.

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