Past indirect structure problems in India before GST

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(Last Updated On: June 15, 2018)
  1. It was complicated,
  2. Urban population was taxed far higher than the rural rich,
  3. Different tax rates in different states resulting in economic imbalance,
  4. No Input Tax Credit in supply chain resulting in inflation in prices of goods and services,
  5. Scope for tax evasion is higher,
  6. ITC of Central Sales Tax(CST) not available to manufacturer/Traders,
  7. ITC of Excise/Service tax not eligible for traders,
  8. ITC of VAT not eligible for service providers,
  9. High compliance cost due to multiple compliances (i.e. return filings),
  10. Cascading effect i.e. tax on tax,
  11. Tax burden on consumers is higher,
  12. Barrier in free-trade because State Govt. levies entry tax at state borders,
  13. Confusion/lack of clarity/interpretational issues.


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