Accounting technology / Glossary / GST (goods and services tax)

What is GST (goods and services tax)?

Definition

GST, or goods and services tax, is a consumption tax on most sales of goods and services, collected at each stage of supply. Registered businesses charge GST on sales, reclaim the GST paid on business purchases and pay the difference to the tax authority. It works like VAT and is used in Australia, New Zealand, Singapore, India and Canada.

Also calledgoods and services tax

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Rates: AU 10%, NZ 15%, SG 9%
India main rates: 5% and 18%
Region: Asia-Pacific and Canada

How GST works

Rates and rules are set country by country. Australia charges 10% and requires registration at A$75,000 of annual GST turnover. New Zealand charges 15% with a NZ$60,000 threshold. Singapore raised its rate from 8% to 9% on 1 January 2024 and requires registration once taxable turnover exceeds S$1 million. India introduced GST on 1 July 2017 and in 2025 moved most goods and services to two main rates, 5% and 18%. Canada charges a 5% federal GST, combined with provincial tax as HST in some provinces. GST is also moving onto e-invoicing networks: Singapore is phasing in InvoiceNow, and Australia and New Zealand use Peppol. Ledgers such as Xero calculate GST and prepare returns; Fonoa and Avalara determine GST for cross-border sellers.

Common questions

What is the difference between GST and VAT?+

In principle none: both tax consumption at each stage of supply, with credits for tax paid on business inputs. The name differs by country, and so do rates, exemptions and filing rules.

When does a business have to register for GST?+

When turnover passes the country's threshold: A$75,000 in Australia, NZ$60,000 in New Zealand and S$1 million in Singapore. Overseas sellers of digital services often have to register as well, under separate rules.

What is an input tax credit?+

The GST a business paid on its purchases, which it deducts from the GST it charged on sales when it files its return. If credits exceed the GST collected, the tax authority refunds the difference.