 If essentials were to be exempted from GST, there would be a need to make up for the revenue shortfall through a higher GST rate on other goods and services, which lower-income households would also have to bear.The government argued that the experience of other countries demonstrated that granting exemptions would distort production and consumption decisions and cause a contentious and highly complex process of determining the goods and services that merit exemption.This would increase compliance and administration costs for businesses, and these costs would be passed on to consumers.