GST is undoubtedly one of the most historic and revolutionary tax reforms taken for the indirect tax structure in India and that pretty much sums up what is GST. Since this new tax regime subsumed numerous other taxes both on the centre and state level including central excise duty, service tax, state vat, luxury tax, entry tax. This has played a major role in creating the ideal scenario of ‘one nation one tax’. 

However, a change of such epic proportions is bound to be heavily scrutinized and as a result of such scrutiny, its numerous advantages and disadvantages have been found. 

So let’s take a quick look at the pros and cons of GST

Advantages of GST:

1.No more cascading of taxes

The cascading effect typically refers to the situation when tax is levied on tax. This has been possible because of the presence of input tax credit under the GST regime. Using the input tax credit you can offset your tax payable at the output

2.Better logistics efficiency

If you have a business in the logistics industry, a GST number registration is going to be a game-changer for you. Due to GST now you don’t need to pay state entry taxes which means commercial property owners don’t need to establish warehouses in different cities just to save taxes. The government has ensured this to reduce the constraints on interstate movement of goods which earlier used to cut into the profit and hamper the growth of trade.

3.Good conditions for unorganized sector

With GST there is a certain degree of accountability and regulation in industries like construction and textile which in the pre-GST era were primarily unregulated.

4.Composition scheme

If you have a small or medium-sized business and your turnover is less than a threshold of Rs.1.5 crore you can decrease your tax burden by opting for the composition scheme

Disadvantages of GST:

1.Lower threshold

Earlier it was mandated that businesses with a turnover greater than Rs. 1.5 crore were only required to pay customs duty. However, with the enactment of GST, this threshold has been reduced to Rs. 40 Lakh. However, if you are a small or medium scale business owner you can use the composition scheme to reduce the compliance norms

2.Expensive GST software

The added expense of getting a GST compliant software or the GST software may be a bit of an extra cost for lots of businesses.

3.Questionable consumer-friendliness

The GST tax may raise the price of certain products since the price will include certain components that weren’t a part of the earlier tax system. If you have a business that deals in such products your customers may not be okay with it.

4.Penalties in case of non-compliance

As a business owner, you will have to prudently pay attention to numerous things. From registration to the proper format of GST compliant invoicing a mistake in any of these steps may attract different kinds of penalties.

5.The learning curve of a new taxation system

The transition from what was largely a paper-pen system to an online process may require a bit of technical learning or hiring tech-proficient people

While the government has been trying to gradually eliminate the problems associated with GST, one may find the change to be difficult. One good thing is that since GST affects the entire nation equally you can find information on it in multiple languages. For instance, if you are not comfortable with this list of GST advantages and disadvantages in English you can find similar lists in other languages.