SRINAGAR: The government expects inflation to moderate by around 2% after the launch of GST as tax incidence on several products will come down with companies passing on benefits to consumers, revenue secretary Hasmukh Adhia told TOI.
"The internal estimate is that after the fixation exercise that we have done, inflation should go down by 2%. But, this is subject to all producers passing on the benefit of downward revision," Adhia said in a conversation after the two-day meeting of the GST Council concluded here.
The availability of input tax credit for taxes and VAT paid on goods will help ensure a lower incidence on works contracts, while services such as telecom and insurance do not see a higher burden, he added. "The main thing in this entire game is education of the consumer. The consumer should not be cheated in this process."
The top bureaucrat in the finance ministry said the government had taken special care to ensure that price of goods and services that make up the consumer price index did not rise. "The rates proposed are very, very reasonable. There is a lot of incidence of tax on cereals or commodities but still we have insisted on keeping it in the exempt list. This will help in keeping CPI under control."
"There is only one return to be filed once in three months. And, there also, only details of turnover are to be filed. Above Rs 50 lakh, they cannot be called small traders. But if it is only a B2C player, then invoice-wise details are not required in the returns." Some states and industry bodies have cited the lack of readiness of small businesses to demand that GST be rolled out from September.
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