Tax Club

Shortcomings of Goods and Service Tax

Created on 20 Aug 2018

Wraps up in 3 Min

Read by 7.9k people

Updated on 11 Sep 2022

GST (Goods and Services Tax) is a kind of indirect tax and which is included in the sale price of goods and services. GST came into effect in India on 1st July 2017. A good go through various stages which starts from a manufacturer and then finally reaches a seller and in all such stages, GST is added.

Shortcomings and Problems

Complicated Structure 

It has been more than one year that GST has been implemented but still, people are doubtful regarding GST. Still, GST seems quite unknown to the people because of its complicated structure.

Online Process 

The procedure regarding GST, is an online process. An online process of a taxation system benefits in various ways but do come with disadvantages too. It becomes difficult for the seller/business to file a return. Also, some people are still unaware of how to use online processes.

Increase in the Price of some Necessities

GST led to the increase in the price of some necessities i.e. some of the very essential commodities which are used for everyday purposes. It made some of the commodities like shampoos, Television, Refrigerator, Air Conditioner etc. which are very important for everyone, pricey. Most importantly increasing tax on such commodities is not going to pose a problem for the rich, but it will pose a problem for the poor, who don’t have such facilities and who have dreamt of such products but now it is a far-fetched dream for them.

Increase in the Cost of Services 

GST has led to an increase in the cost of services like broadband services, banking charges, insurance premium etc. These are nowadays required by everyone and it is also necessary for the people of India to become more aware of the use of banking facilities, broadband services etc.

To digitalize India, it is very important to make people aware about these services because without people being aware of these services they won’t be able to use it and without the contribution of each and every one our Nation can’t develop. But due to the high charges it is possible that people will avoid the use of such services and hence they will remain unaware.

So, this is one of the biggest shortcomings of GST as on one hand the Govt. wants to promote the use of bank, internet (as a part of Digital India) but on the other it is increasing the charges which will itself hamper the efforts of Govt. and will finally hamper the development of Nation.

Non-GST Products 

The main purpose of GST was to bring a uniformity for all goods and services but there are still certain Non-GST products like Petrol, Natural gas etc. So, there are still certain products which do not come under GST and the purpose of bringing uniformity has not been served.

Still, Different Indirect Taxes Prevail 

GST came to replace every other indirect tax like VAT (Value Added Tax), Luxury tax etc. But still there are different forms of GST like Central Goods and Services Tax, State Goods and Services Tax, Integrated Goods and Services Tax. So, still indirect taxes exist but with different names.

No Concern for Disables

Before GST, there were various products for disables which were tax-free but after GST, tax have been imposed on them also. Things like brail paper, hearing aid etc. are also under GST. So, the unprivileged section has been affected in a negative way which is also one of the disadvantages of GST.

To know about different Slabs of GST, Click Here

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Rishika Mukherjee

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Mukherjee is an avid reader and loves to write as much as read. She is the youngest of all but handles chores like a 50-year-old woman. She takes a lot on her plate and somehow, eerily manages to get the job done. As Hazel Grace stated, she could read a good author's grocery list, and so would Miss Mukherjee. 

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