• Notification Date: 28-02-2025
• Notification No: N/A

India's Tax Trap: Slowing Growth, Spurring Black Markets

India's very high tax rates are being costly to businesses and consumers alike, dampening economic growth and inducing tax evasion, smuggling, and black markets.
With India's 28% GST rate, one of the highest globally, India remains behind other nations with lower rates in tax collection efficiency.

The automobile industry is in crisis with 8 lakh unsold vehicles worth Rs.78,000 crore and 37 million jobs at risk because of over-taxation.
The construction industry is also hit by a 31.36% tariff on cement, impacting employment and economic activity.

The 53% cigarette tax also caught up with the government, and now it is losing Rs.21,000 crore in tax as smuggling.
Dabba trading is also being more and more used by stockbrokers, with 25% of trading taking place in the organized markets because of higher Securities Transaction Tax and Capital Gains Tax.

India's good taxpayers and companies are being squeezed while the black market flourishes and millionaires leave the country.
Economists are warning that excessive taxes do not always mean higher revenues—excessive taxes are strangling economic growth.
Rather than increasing taxes, India needs to address tax efficiency and economic reforms for sustainable development.