GST – Disadvantages and Demerits

GST is expected to be a great tax reforms in the Indian taxation system and however, for a country like India where computer literacy is about to 7% to 9%, then it’s difficult for small and micro enterprises to come online and start a business by use of GST software. GST good for public business but as we know India’s economy drives from villages.  Though GST is considered to be a historical tax reform in India, it also has some demerits of GST. However, we believe that over the period technology and other trouble related GST implementation would not be a big challenge.

In This article, we will Discuss the Disadvantages and Demerits of GST.  Since we all are running in a dynamic change environment.

Due to the greatest tax reform in India due to the introduction of GST the business and consumers are facing challenges which are explained below in detail:

  • Change in Technology

In India, where most of small business using manual billing system during the indirect tax regime and few of them (. i.e. ERP or Tally software for filing excise return, service tax return and vat returns) will now have to transit to GST by upgrading their software as per the GST compliance requirement which will increase the burden of buying the new software or upgrade the software as per the GST compliance requirement.

  • GST Compliance

The introduction of GST has created lots of concerns in the minds of the persons. Changing over from the traditional system of working to a completely digitally driven compliance is very difficult for people to adjust to the change. Most of them are worried about the preparation of invoices, filing of returns, record keeping.

  • Operating Cost

Most of the businesses in India prefer not to hire tax professional for their compliances. However, due to GST they have to take assistance of the Tax professionals to understand the GST and transit to a completely new system

Due to this they will incur additional cost of hiring the tax professionals

  • Online Procedure

GST regime has completely adopted fully digitalized environment. GST compliance in the form of online filing of returns, payment of GST is to be done online. Many small businesses carried on India are not technology driven have to promote themselves to adapt and learn the complete digitalized environment.

  • Multiple Registration

In GST registration of a person carrying on the businesses in the different state are required to take the registrations separately for each of the premises. This will increase his cost of administration

  • Midyear Launch

Due to the introduction of GST in the middle of the year, businesses would face the problem in taxation and report at the end of the financial year.