The goods and services tax (GST) is set for a July 1 launch. While businesses have adjustments to make, consumers do not have much to worry about, apart from some possible disruption in supply. ET explains
1) MANY RATES Pundits say multiple rates have distorted GST, but consumers are gainers
WHAT IT MEANS GST rates will be as close as possible to earlier effective rates
2) NO REVENUE GAIN FOR GOVT The government expects a net revenue loss from GST. Increased compliance could make up for this On the whole, tax incidence will go down for the consumer
3) EXEMPT GOODS Items and aam aadmi goods exempt or pegged at lower rates
WHAT IT MEANS The common consumption basket is not likely to get any more expensive
4) SERVICE TAX RATE UP BUT EFFECTIVE TAX LOWER Service tax rate will be higher under GST, but service providers will also get input tax credit for VAT and cascading of taxes will disappear
WHAT IT MEANS Even if rates are higher, end prices for consumers may not go up
5) STABLE RATES Neither the Centre nor states will be able to raise rates easily
WHAT IT MEANS Tax rates will remain stable
6) BIG BROTHER WILL BE WATCHING An antiprofiteering body is being set up
WHAT IT MEANS If any business does not pass on benefits of lower taxes to consumers, it can get into trouble
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