The Goods and Services Tax (GST) is a value-added tax system implemented in several countries around the world. While both India and Canada have implemented a GST system, there are some notable differences between the two.
Tax Rates: The tax rates in the two countries differ significantly. In India, there are four tax rates (0%, 5%, 12%, and 18%) for goods and services, while Canada has five tax rates (0%, 5%, 12%, 13%, and 15%) depending on the province or territory.
Exemptions and Thresholds: India has an exemption threshold of INR 20 lakhs for businesses to register for GST, while in Canada, the threshold is CAD 30,000. There are also differences in the types of goods and services that are exempted from the tax.
Tax Collection: In India, GST is a dual tax system, with both the Central and State governments levying the tax. In Canada, GST is collected by the federal government and shared with the provinces and territories.
Compliance: The compliance requirements for GST in India are more stringent compared to Canada. Businesses are required to file monthly returns, and there are penalties for non-compliance. In Canada, businesses are required to file quarterly returns, and the penalties for non-compliance are lower.
Overall, while both India and Canada have implemented a GST system, there are differences in tax rates, exemptions and thresholds, tax collection, and compliance requirements.