GST (Goods and Services Tax)
$$\text{GST Amount} = \text{Net Price} \times \frac{\text{GST Rate}}{100}$$
What is GST (Goods and Services Tax)?
GST (Goods and Services Tax) is the name used in Australia, Canada, India, New Zealand, and Singapore for a tax that works identically to VAT. It is a multi-stage consumption tax collected at each step of production and distribution. Each business in the supply chain pays GST on its purchases and collects GST on its sales, remitting only the difference to the government. End consumers bear the full cost because they cannot reclaim it.
The key rates vary by country: Australia applies a flat 10% GST, New Zealand 15%, Singapore 9% (raised from 8% in January 2024), Canada's federal GST is 5% (combined with provincial taxes up to 15%), and India uses a multi-rate structure of 5%, 12%, 18%, and 28%. Despite the different name, any VAT calculator works for GST calculations, since the formula is identical.
When to use GST (Goods and Services Tax)
Use GST calculations when invoicing in Australia, Canada, India, New Zealand, or Singapore; when pricing goods for sale in those markets; or when checking whether a quoted price includes or excludes GST. In Australia and New Zealand, consumer prices are usually shown GST-inclusive; in India, prices are often shown net (excluding GST).
Worked examples for GST (Goods and Services Tax)
This table quickly gives you the overview you need to understand GST (Goods and Services Tax) and its most important comparisons.
| Country | GST rate | Net price | GST amount | Gross price |
|---|---|---|---|---|
| Australia | 10% | AU$100 | AU$10 | AU$110 |
| New Zealand | 15% | NZ$100 | NZ$15 | NZ$115 |
| Singapore | 9% | S$100 | S$9 | S$109 |
| Canada (federal) | 5% | CA$100 | CA$5 | CA$105 |
Common pitfalls
Canada's tax system is especially complex because the federal GST is often combined with a provincial sales tax (PST) or replaced by a Harmonised Sales Tax (HST) that merges both. The combined rate ranges from 5% (Alberta, which has no provincial sales tax) to 15% (New Brunswick, Newfoundland, Nova Scotia, PEI). Always use the combined rate for Canadian calculations.
Frequently asked questions about GST (Goods and Services Tax)
Is GST the same as VAT?
Yes. GST and VAT are the same type of tax with different names. Both are multi-stage consumption taxes where businesses collect tax on sales and reclaim it on purchases. Europe calls it VAT; Australia, Canada, India, New Zealand, and Singapore call it GST. The formula for calculating both is identical.
What is the GST rate in Australia?
Australia applies a flat 10% GST on most goods and services. Some supplies are GST-free (fresh food, certain medical services, and exports) and some are input-taxed (financial services, residential rent). The Australian GST has been in force since 1 July 2000.
How do I reverse GST from a price?
Divide the GST-inclusive price by (1 + GST Rate / 100). For an AU$110 price including 10% GST: AU$110 / 1.10 = AU$100 net; the GST was AU$10. This is the same reverse formula used for VAT. Never subtract the percentage directly from the gross price.
Quiz: how well do you know GST?
1. How does GST flow through each stage of the supply chain?
2. What is the relationship between GST and VAT?
3. According to the examples table, what is the gross (GST-inclusive) price for a S$100 item in Singapore at the current 9% GST rate?
4. What makes Canadian GST calculations especially complex, according to the pitfalls section?
5. A GST-inclusive invoice shows AU$110 with 10% GST included. Which method correctly extracts the net (pre-GST) price?