If you buy a commercial shop in India...: Finfluencer calls small business taxation ‘pure madness
For small businesses in India, renting a commercial space is more than just a cost — it’s a tax trap. The 18% GST on commercial rent eats directly into profit margins, making survival harder for entrepreneurs operating on thin financial cushions.
Wisdom Hatch founder and financial influencer Akshat Shrivastava took to X to break down how this tax hurts small businesses. “For most ‘good’ businesses, the profit margins are 20%,” he wrote.
“But, if you buy a commercial shop in India. And, rent it. You have to pay 18% GST. So you charge that amount from the tenant (18%) and wipe out his profit margins.”
Under India’s Goods and Services Tax (GST) system, commercial property rentals are taxed at 18%, which landlords typically pass on to tenants. For small businesses, this additional cost can significantly impact cash flow and profitability.
Shrivastava highlighted how this adds layers of taxation for businesses that are already heavily taxed. “Now commercial property is an ‘investment’. You have already bought that by paying (20-30% taxes, depends on your tax slab). Charging non-sense taxes. And, hoping that businesses will somehow survive (& create jobs) is just pure madness,” he argued.
