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Chapter: 11th Commerce : Indirect Taxation

Disadvantages of GST

The disadvantages of GST are stated below:

Disadvantages of GST

Besides the listed advantages the GST is also criticized for many reasons. The disadvantages of GST are stated below:

1.        Several Economists says that GST in India would impact negatively on the real estate market. It would add up to 8 percent to the cost of new homes and reduce demand by about 12 percent.

2.        Another criticism is that CGST, SGST are nothing but new names for Central Excise/Service Tax, VAT and CST. Hence, there is no major reduction in the number of tax layers.

3.        A number of retail products currently have only four percent tax on them. After GST, garments and clothes could become more expensive.

4.        The aviation industry would be affected. Service taxes on airfares currently range from six to nine percent. With GST, this rate will surpass fifteen percent and effectively double the tax rate.

5.        Adoption and migration to the new GST system would involve teething troubles and learning for the entire ecosystem.

 

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11th Commerce : Indirect Taxation : Disadvantages of GST |


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