‘India's GST Most Complex Globally’

Trade & Policy

‘India's GST Most Complex Globally’

The Indian Goods and Services Tax (GST) system is among the most complex in the world with not only one of the highest tax rates but also one of the largest number of tax slabs, the World Bank has said. It added that India has the highest standard GST rate in Asia, and second highest in the world after Chile.

According to the World Bank's biannual India Development Update report, most countries in the world have a single rate of GST: "49 countries use a single rate, 28 use two rates and only five countries including India use four rates," it said. Apart from India, the countries that use four or more GST rates are Italy, Luxembourg, Pakistan and Ghana.

According to the World Bank report, the fiscal threshold for businesses to fall under the full GST impact is also the highest among all comparable countries. ld Bank says India's GST system among the most complex globally. Reuters image.

In India, businesses having annual sales above a threshold of Rs 1.5 crore fall under the full GST, and are thus liable to remit GST and eligible to deduct input tax credit. India started with a threshold of Rs 75 lakh, but in a span of a few months doubled it to Rs 1.5 crore mainly to ease the cost of compliance of small and medium enterprises, it said.

The World Bank said, "Despite the initial hiccups, the introduction of GST is having a far-reaching impact on reducing tax-related barriers to trade barriers, which was one of the primary goals of the introduction," it said.