GST (Goods and Services Tax)
Regional Schemes · Regional Tax Systems
What is GST (Goods and Services Tax)?
GST (Goods and Services Tax) is a consumption tax charged on the sale of goods and services, including imports, in countries that use this name instead of 'VAT' - Australia, New Zealand, Canada, India, and several others. It works on the same underlying principle as VAT: a percentage of value, ultimately paid by the end consumer.
For an imported order, GST is generally charged on the goods' value (and sometimes shipping and duty too), either collected by a registered overseas seller at checkout below a country's low-value threshold, or assessed at the border above it.
GST and VAT are the same idea wearing different name tags - if you've understood how VAT works on an import, GST works the same way. The countries that call it GST (Australia, New Zealand, Canada, India, and others) just adopted different terminology than the EU and UK did.
When to Use It
Check for GST instead of VAT when shopping into Australia, New Zealand, Canada, India, or another GST-based market - the mechanics (checkout collection below a threshold, border assessment above it) mirror VAT-based systems even though the name and exact rate differ.
Examples for GST (Goods and Services Tax)
| Country | GST rate | Low-value threshold |
|---|---|---|
| Australia | 10% | A$1,000 (checkout-collected) |
| New Zealand | 15% | NZ$1,000 (checkout-collected) |
| Canada | 5% federal (5-15% combined with province) | CAD 20 general / CUSMA-based higher tiers |
| India | 5-28% IGST (varies by category) | No general low-value exemption |
Assuming every GST-charging country uses the same rate is a common mistake - unlike the EU's relatively narrow VAT band, GST rates and rules vary widely between GST countries, and Canada complicates things further by layering a province-specific tax on top of the federal rate in most provinces.
Frequently Asked Questions About GST (Goods and Services Tax)
Is GST different from VAT?
Not in principle - both are consumption taxes calculated as a percentage of value. "GST" and "VAT" are just different regional names for essentially the same mechanism.
Do all GST countries charge GST on imports the same way?
No - each country sets its own rate, threshold, and collection method. Australia and New Zealand both use a checkout-collection model below a threshold, for example, while India layers GST on top of separate customs duty and a surcharge, with no low-value exemption.
Does Canada's GST work differently from Australia's or New Zealand's?
Yes - Canada adds a province-specific tax on top of the 5% federal GST in most provinces (making the combined rate 5-15% depending on where the buyer lives), unlike Australia and New Zealand's single national rate.
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