GST act as an indirect tax which has replaced many indirect taxes in India. Whereas on one side gst registration number seems fruitful for Indian public on another side some economist and gst consultants in India has put light on disadvantages of GST in India. It is considered that GST has some negative points for businesses and end buyers. The article will cover all those negative aspects of GST which comes to light by educationist and economist.
High Taxes on Small & Medium Businesses:
The small and medium businesses are largely affected by GST. As per previous tax law, manufacturing units who have a turnover of more than 1.5 crores need to pay exercise duty. But after launching of GST, the turn over the limit has been reduced to Rupees 20 lakh due to which many SME’s has to bear the burden of exercise duty.
The rise in Operating Cost
The new tax law which is GST has raised the cost of operations for many small and medium businesses. Before launching of GST, such small business owners fill their ITR on their own. But after GST they have to hire professional CA’s as GST tax rules are entirely new for them. It expands their cost of operation which was not necessary before.
The requirement for New Business Software:
A large number of companies using accounting software such as ERP which has an inbuilt system to calculate VAT, Service Tax, etc. but due to changing taxation they have to buy new software or upgrade the existing one for taxation.
Change in Taxation affect product cost:
Before the implementation of GST, some industries such as the textile industry paid zero or very fewer taxes. As per gst registration number India, there is four type of proposed tax that is 5%, 12%, 18%, and 28%. It has put the extra tax burden on many manufacturing units which in turn has raised the cost of products which is also born by the last user.
Petroleum Product is not included in GST:
Information given by gst consultants in Delhi has proven that new tax rule which is GST has not included petroleum product in it. It affects most of the manufacturing units which require petroleum products to run their factories such as petrol, diesel, gasoline, etc. The result is that the final product produced has to be selling at a higher rate which impacts their business. Some industries face such issues are plastic industry, etc.
Registration in the Several States:
As most businesses are involved in the interstate transaction of goods and services, due to GST, they have to register their business in transacting states also. It affects both their running and operating cost. Now they have to pay a fee for hiring gst registration consultant to run their business effortlessly.
Difficulty in Running E-commerce Business:
Most small and medium businesses sell their products online via shopping websites or ecommerce websites. After the launch of GST, they have to register their business in almost all the states where they want to sell their products. Another hurdle is that ecommerce helpers are collecting TCS (Tax Collected at Source) under GST which has increased accounts complication and business agreements.
You can conveniently go for gst registration in Delhi online to run your business and follow the tax ethics. GST act as a two face of one coin which is good for some businesses and has a negative impact on others.