Goods and Services Tax (GST)

What is the Meaning of Goods and Services Tax (GST)

An additional tax that governments impose on certain products sold to the general public of their country. Consumers often pay the GST by paying the business they’re buying from first and the business then pays the government in question. Businesses will add the cost of the goods and services tax to the product they’re selling at checkout. Once businesses have acquired payment for the product and for the GST, they forward the appropriate funds to the government of the country they are selling to.

How Does The GST System Work

There are a couple of different ways in which the GST system works. The most common is having a single unified GST system. This means that the central taxes and state-level takes are combined into one single tax amount that your business pays upfront. Other countries like Brazil or Canada have a duel system in which you’d have to pay the federal GST and state-level GST separately.

In either case, the total amount of goods and services tax you’ll have to pay will likely be different for each country you’ll be shipping to.

Which Countries Impose a Goods and Services Tax (GST)

Since 1954, when France first began using the GST system, approximately 160 have hopped on board using this system. Some common countries US merchants ship to that impose a goods and services tax includes Canada, Australia, the United Kingdom, Spain, and Itlay. India recently adopted a dual GST system in 2017.

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