Which was the first country in the world to introduce a Goods and Services Tax (GST) / value-added tax system?

France was the first country in the world to introduce a value-added tax (VAT), known in French as the "Taxe sur la valeur ajoutée" (TVA), in 1954. It was designed by Maurice Lauré, a French tax official, who is called the "father of VAT". GST is a form of VAT, so France is regarded as the first country to adopt a GST-type tax.

How VAT/GST works:

• It is an indirect tax on the supply of goods and services, collected at each stage of production and distribution.
• At each stage, the seller pays tax only on the "value added", because they can claim credit (input tax credit) for the tax already paid on their inputs.
• The final burden falls on the consumer.
• This avoids the "cascading effect" or "tax on tax" of older systems.

Today, more than 160 countries have a VAT or GST. Canada (1991), New Zealand (1986), Australia (2000) and Singapore (1994) call their version "GST".

GST in India:

It was introduced on 1 July 2017, launched at a special midnight session of Parliament on 30 June 2017.

It was made possible by the 101st Constitutional Amendment Act, 2016. Assam was the first state to ratify the amendment.

It replaced many central and state taxes, such as central excise duty, service tax, VAT, entry tax and entertainment tax, under the idea of "One Nation, One Tax".

India has a dual GST: Central GST (CGST) and State GST (SGST) on supplies within a state, and Integrated GST (IGST) on supplies between states and on imports.

The GST Council (Article 279A), chaired by the Union Finance Minister, with state finance ministers as members, decides rates and rules.

In September 2025, the GST Council simplified the rate structure into mainly two slabs, 5% and 18%, with a higher rate of 40% for some luxury and "sin" goods ("GST 2.0").

1 July is celebrated as GST Day.

Why not the other options?

• ✗Canada introduced GST in 1991.
• ✗New Zealand introduced GST in 1986.
• ✗Australia introduced GST in 2000.