Small businesses in India struggle with high GST costs

Akshat Shrivastava, a financial influencer, recently criticized the taxation on commercial shop rentals in India. He described the 18% Goods and Services Tax (GST) as harmful to small businesses. Shrivastava shared his thoughts on social media, stating that the tax directly affects profit margins. Most small businesses in India operate with profits around 20%. When a small business rents commercial space, they often pass the 18% GST cost onto tenants. This can wipe out tenant profit margins, making it difficult for them to succeed. Shrivastava explained that small businesses are already struggling and this tax adds extra financial pressure. The Central Board of Indirect Taxes and Customs recently exempted small taxpayers renting from unregistered landlords from the 18% GST. However, this relief does not apply to businesses renting from registered property owners. Shrivastava pointed out that even with tax credits, the final cost still ends up hurting consumers and businesses. He believes the multiple layers of taxation are unreasonable and that expecting small businesses to thrive under these conditions is unrealistic.