France was the first country to implement GST to reduce tax-evasion. Since then, more than 140 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.
European countries have one rate of GST as they do not have poor families, unlike in India, where families cannot be burdened with the same tax as the rich.
All around the world, GST has the same concept. In some countries, VAT is the substitute for GST, but conceptually, it is a destination based tax on consumption of goods and services. That still needs to be resolved among the different governance in the world is the GST rate.
Some are still struggling to rationalise an adopted rate structure. While there were strong differences at the time of introduction of GST due to political divisions in Canada, GST sustained despite the opposition. The Government of Canada has reduced the GST rate a couple of times since it was introduced.
However, some others countries which started with very low rates have been forced to increase the rates very soon after introduction to raise more resources.
Earlier in the week, Revenue secretary Hasmukh Adhia said that the ultimate goal of the government should be to move to a single or dual-rate goods and services tax regime.
"Ideally like all other advanced countries, we should have got one GST which is levied by one government only, and not a dual GST and also a GST in which there is a uniform rate.
In our country, where there are different strata of society to be looked after, it's not possible to have an ideal GST. We are in a good direction. We will prefer to have a single GST rate but after sometime. That should be the ultimate goal - instead of having too many complicated rates, at least one or two rates should be there," Adhia said during a panel discussion on Doordarshan News.
Canada 13 to 15%
New Zealand 15%
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