GST rates are based on the principle of Revenue Neutrality, which ensures that the overall consumption expenditure is not affected significantly
The roll out of the Goods and Services Tax (GST) in the country will not have significant impact on overall inflation measured in terms of Consumer Price Index (CPI) but costs of housing, transport and communications sectors may rise marginally, said a report prepared by Indian Institute of Management – Ahmedabad.
"With the move towards multiple slab structure, the overall impact on inflation is expected to be moderate, at 0.6% on an average. Service sector is likely to see price rise by 0.3% to 0.8%, as opposed to goods sector, where prices are expected to fall by 0.2% - 0.3%," said the report prepared by IIM-A professors including Sebastian Morris, Ajay Pandey, Sobhesh Agarwala and Astha Agarwala.
While the report highlights segments that can witness rise and fall in costs because of GST, the change is marginal. Housing sector is expected to see a price rise of 0.52%, followed by transport (0.22%), clothing (0.1%), fuel and light (0.06%), recreation and amusement (0.05%) and health (0.04%). Prices of intoxicants such as paan masala are unlikely to be impacted whereas FMCG and healthcare are expected to see a decline in prices. Prices of personal care products are likely to witness a marginal drop of 0.15%, followed by education (0.13%), fuel and light (0.11%) and health (0.0299%).
Housing was previously taxed at 15% (with abatement up to 40% in rents, and 70% in case of under construction flats). However, it will now attract 18% GST. Transport sector is subject to 28% GST and communication services 18%.
The report also said that people are unlikely to get affected by the shift to the GST regime, while wealthy households may have to spend more to purchase sin goods. GST rates are based on the principle of Revenue Neutrality, which ensures that the overall consumption expenditure is not affected significantly. It also said that anti-profiteering provisions would further protect consumers ensuring that rate cut benefits are passed on to them.
BAD RECORD
- GST rates are based on the principle of Revenue Neutrality, which ensures that the overall consumption expenditure is not affected significantly
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "IIM-A")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}