Goods and services tax (GST) is the name several countries, including Australia, Canada, India, Singapore and New Zealand, give to a broad consumption tax charged at each stage of the supply chain and ultimately carried by the consumer. It works exactly like value added tax: a registered business offsets tax on purchases against tax on sales and remits the difference, and any supply is in scope unless a statute excludes it. Rates, exemptions and administration vary; India splits central and state components, while Canada mixes federal, provincial and harmonized rates. Overseas digital service suppliers usually must register and charge local tax on consumer sales, sometimes from the first transaction, and many systems now deem the marketplace the supplier.
How does GST work
GST and value added tax are the same instrument. A registered business offsets tax on purchases against tax on sales and remits the difference, so nothing compounds down the chain, and a finance team that has run one system recognizes the other on sight. What varies is everything built around that core.
What is goods and services tax, country by country
Rate structures differ: one rate in some systems, several plus a zero band in others. Exemption lists differ, and financial services are treated inconsistently across them. Administration differs most of all. India runs central and state components on the same supply. Canada layers a federal tax with provincial taxes in some provinces and a harmonized rate in others. Filing frequency, invoice format and e-invoicing mandates are all local decisions, so the goods and services tax meaning stays constant while the rules under the label do not.
When a foreign seller has to register
Domestic turnover thresholds usually do not protect a non-resident. Most GST regimes now require an overseas supplier of digital services to register and charge local tax on consumer sales, in several cases from the first transaction. The seller has to establish where the customer is, keep evidence of it, and apply the local rate. Business customers are often handled by a reverse charge instead, which shifts the obligation to the buyer and leaves the invoice tax-free but requires a statement of why.
Platforms treated as the seller
Many GST systems now deem the marketplace, rather than the underlying merchant, to be the supplier on sales made through it. That converts a tax question into an engineering one: location evidence, rate tables, invoice fields and remittance all have to live inside the platform's payment flow, which is why it belongs to marketplace compliance rather than to finance alone.
Registering below the threshold on purpose
Voluntary registration pays off when a business sells mainly to other registered businesses, since customers reclaim what they are charged while the seller starts recovering tax on its own costs. Selling to consumers, the calculation flips, because registration adds tax to a price the buyer cannot reclaim. Either way it starts a filing calendar that runs whether or not there is anything to declare, and that duty sits with tax compliance. Goods entering the country are assessed at customs alongside import duty.