Article
Advantages and Disadvantages of GST in India
What is GST?
Goods and Services Tax is an indirect tax that was rolled out in India on 1st July 2017 with the aim of making taxation in India simple. It unified indirect taxation, and since 22nd September 2025 it works mainly on two slabs of 5% and 18% (with 40% on select sin and luxury goods). Even so, there are advantages as well as disadvantages of GST.
What are the advantages and disadvantages of GST in India?
| Advantages of GST | Disadvantages of GST |
| GST has eliminated a lot of taxes in India | It has increased costs for some businesses, due to the purchase of accounting/e-invoicing software |
| It has increased the threshold for registration (Rs. 40 lakh for goods, Rs. 20 lakh for services) | Businesses must stay continuously GST-compliant (e-invoicing above Rs. 5 crore, monthly/quarterly returns) |
| It has introduced composition scheme for small businesses (up to Rs. 1.5 crore turnover) | It has increased the operational cost of compliance for small firms |
| It has made tax filing easy, with two main slabs of 5% and 18% since September 2025 | Petroleum products and alcohol remain outside GST, so credit on these inputs is blocked |
| With GST the number of compliances are less | Frequent rate and rule changes require businesses to keep their systems updated |
| It has defined treatment of E-commerce operators | It is a fully online taxation system, which can be a hurdle for less digitised traders |
| It has also improved the efficiency of logistics | |
| The Unorganized sector also regulated under GST |
