Definition
GST (goods and services tax) is a broad consumption tax applied to most goods and services, functioning like VAT. It is used in Australia, Canada, New Zealand, Singapore, India, and others. Registered businesses charge GST on sales, claim credits for GST paid on business purchases, and remit the net amount.
Also called: Goods and services tax
GST in practice
Invoice requirements under GST are strict. In Australia, for example, a tax invoice over a set amount must include the words "Tax Invoice", the seller's ABN, and the GST amount. In Canada, GST may be combined with provincial tax as HST.
Frequently Asked Questions
What is the difference between GST and VAT?
They work the same way: tax is collected at each stage and businesses reclaim what they paid. The name depends on the country. Some countries, like India, use GST with multiple rate tiers.