Countries that tried GST before India

The Goods and Services Tax (GST), India’s biggest tax reform since Independence, will unify a $2 Trillion economy into a single market. This big tax overhaul will be a test for India. Not only does the country’s size and diversity make the challenge daunting – 1.3 Billion people, 29 states, 22 official languages – it’s also implementing multiple rates. Here are some countries who had implemented GST are –

Canada – When Canada implemented its goods and services tax in 1991, retailers offered customers “Don’t Blame Me for the GST” stickers amid cash-register snafus and vending machine meltdowns.

Australia – Three years after pledging in 1995 to “never” introduce a GST, Australia PM John Howard reversed his policy for the 1998 election, saying he was seeking a mandate to implement a 10 percent tax on most Goods and Services. He barely won amid a voter backlash, but that narrow victory was enough to legislate a GST that’s been used to fund health care and schools funding for the states. It excludes some politically contentious items such as fresh food, pre-owned real estate, medical and education services. Current PM Malcolm Turnbull toyed with the idea of increasing the tax to 15 percent, but ruled that out in February 2016.

South Korea – Following the introduction of a value added tax in 1977, a game of hide and seek broke out between tax officials implementing the new system and market vendors seeking to avoid taxation, prompting newspaper Dong-A llbo in 1978 to describe the year as a “365-day nightmare”. The day the indirect tax regime applied some taxi drivers thought the new system applied to taxi fares and argued with customers that they need to pay 10 percent more than the price on the meter.

Malaysia – Following the implementation of GST in April 2015, there were reports cash registers weren’t calibrated to deal with the new regime, government agencies weren’t ready and GST refunds were delayed.