Indian indirect tax system has seen reform in 2017 when government implemented GST [Goods and Service Tax]. GST introduced as a reform for simplifying framework of indirect tax collection of India.

As you know every coin has two side GST also have some advantages and disadvantages. Some expert claims is best reform and on other hand some experts feels it is disaster for economy. Lets dive into some key advantages as well as disadvantages of GST.

Let’s see the advantages at first.

Advantages of GST Tax

Simplified taxation: GST brings simple version of tax calculations as well as tax collection. It’s also providing online and quick returns filing with simple and less tax slabs.

More Revenue Generation:  People usually avoid paying tax because of complicated procedures and calculation. GST is now offering simplified process and easy rules to encourage the tax payers for taking entry in tax net happily.

Minimised cost of Logistics and Inventory is possible now. GST offers speedy claims of tax for state and centre governments. This leads toward speedy transit though state borders. Indians will save crores of rupees of duties and other expenses occur because of delays.

Investment Booster:  In old tax system there is no tax input on capital goods but now GST offer input on capital goods also.  That leads growth in the investment with an expected 6% increase.

Standardization:  Simplest tax calculation and same slabs all over country leads towards standardization of rates for same product across the country. People now can easy understand invoice of their purchase.

Transparency and Less Corruption because of GST: GST regarding operations like tax filing, claim process, verifications, fine and fees collection etc are now being executed via online portal. So there is no chance to corruption between online processes.

GST offers many advantages to all of stakeholders like retailers, cutomers, manufacturers, transporters, and each n every business owner.

Now we will take look at disadvantages of GST

As per some experts these are some disadvantages of GST in India.

  • As per rule it has been proposed that the Central Government will compensate the loss arising out to States on implementation of GST for a period of five years it will lead loss for economy.
  • Compliances with deadlines: In GST tax filing system you need to file returns 3 times a month for every state in which you operate your business. That means you need to complete at least 36 filings in a year per state.
  • GST Proposal is not friendly to important service sector like banks: GST hike in service sector like banks from 14 to 18 % so it will leads to increase in costs

More load on small business owner: As per GST rule every one whose turnover exceeds 20 lakhs needs to pay GST and follow all rules. It leads them towards hike in their business costs.

Lack of computer literacy: Government claims simplification of process  and reduction in costs of filing tax but in rural areas of India there is lack of computer litracy so people needs to spend money on filing services.


These are some advantages and disadvantages of GST. GST law is still in its primary stage & it will tend to have problems and issues. However, the Indian Government is trying its 100% to simplify the GST compliance procedures & promptly addressing the issues.

Currently there may be many obstacles in GST process  such as an implementation of law or adaptation by people, but GST would surely prove beneficial for each and every segment of the Indian economy just it will take some time..

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