Revenue Secretary Hasmukh Adhia has said, Inflation will fall by two per cent on implementation of the goods and services tax, GST, and will create buoyancy in the economy. In an interview, he said the all-powerful GST Council will meet next week to decide on tax rates of contentious items like gold, bidi and biscuits, just in time for its rollout from July 1.
Mr Adhia also expressed confidence that the requirement of compensation to make up for revenue loss of any state will be fulfilled from cess on demerit and luxury goods like car and tobacco.
With the stage set for the biggest overhaul of India’s tax system since Independence, the government will launch a massive awareness campaign to educate consumers about GST so that they are not fleeced by traders in the name of new tax.
The Council over the two days last week assigned tax rates to more than 500 services and 1,200 goods by setting them in five broad rates of 5, 12, 18 and 28 per cent.
GST will be a single nation-wide sales tax replacing astring of central and state levies.