Newfoundland – Canada to raise its HST rate in 2016

Canada’s rising Harmonised Sales Tax

The Canadian province of Newfoundland and Labrador is planning to raise its Harmonised Sales Tax (HST) rate from 13% to 15% on the 1st of January 2016. HST is a combined tax made up of federal Goods & Services Tax (GST) and local Provincial Sales Tax (PST), the GST rate will remain at 5% but the PST will increase from 8% to 10%.

The recoverable amount will also be changing in 2016 and 2017; Municipalities and local service districts will receive a partial rebate on the provincial portion of the HST of:

• 25% effective January 1, 2016
• 57.14% effective January 1, 2017

So this will only be effective on the 10% PST.

India Increase service tax rate

India raises service tax rate to 14%

As of the 1st of June 2015 India’s service tax has increased to 14%, this is a 1.64% rise in the effective VAT rate which was previous 12.36% made up of 12% Service Tax and 2% surcharge for education on the 12%. The service tax currently affects all services except for a select few.

This is part of the transition over to Goods and Services Tax (GST) which is set to roll out in April 2016, the GST Bill seeks to streamline India’s tax administration by eliminating different tax structures in different states, as India operates one of the most intricate and ineffective consumption tax regimes in the world. There are a number of taxes, including:
• Indian VAT levied on goods separately by most of the 29 Indian states
• Indian Service Tax which is charged on services
• CENVAT a VAT on the supply of goods charged by the central government
• Professional Tax

This means that often the taxes over lap resulting in double taxation, and also imposes a heavy administration burden on businesses, meaning that the government finds it hard to forecast a budget as the tax system is so unstable they cannot predict revenues accurately. This is why they plan to introduce the country-wide GST. GST will be levied on the supply of goods and services, with potential reduced rate and exempt supplies for essential supplies such as foodstuffs and public transport, which is expected to be implemented at around 16%, the current rise to 14% is just the first stage in this tax overhaul.

Guernsey rejects GST proposal

The possible introduction of GST was proposed in the Personal Tax, Pensions, and Benefits Review. The measure has met with strong local opposition, especially from the retail sector, as the lack of a value-added tax is seen as a key appeal to tourists.

Guernsey’s Parliament has rejected a proposal to introduce a 5% GST rate into Guernsey, which means it will not be following in Jerseys, the other large island forming part of British Crown dependency, footsteps as it introduced GST in 2012. The council ruled out the sales tax by 28 votes to 18, with many believing that GST is not suitable for the Island and its economy despite a predicted £50m revenue generation. However it is yet to be ruled out for the future with many minsters believing the debate will make a comeback.

What is the difference between GST and VAT?

What is the difference between GST and VAT?

For all intensive puposes VAT and GST are essentially the same type of indirect tax and work in virtually the same way.  Going on the pure defininition VAT is linked to tangible goods, whilst GST is linked to both tangible goods and services. However in most countries that apply VAT, especially European ones, VAT is applied to both goods and services, which would indicate little difference between the two. Yet  there is a big difference between Sales and Use Tax, used in places such as America, and VAT/GST.

Where there is  a requirement to split between goods and services this can easily be accommodated in your Oracle ERP System.