GST leads to ~320 monthly saving for households: Study

IMPACT Reform has reduced indirect tax burden: Govt note

NEWDELHI:INDIAN households are saving, on average, a monthly ₹320 each on consumption of staples such as cereals, edible oil and sugar as well as snacks and sweets under the Goods and Services Tax (GST) regime that kicked into force on July 1, 2017, reducing the indirect tax burden on consumers, the finance ministry said in an internal note.

A household saves ₹94 a month on the consumption of cereals such as rice and crop because no GST is levied on them. Indirect taxes on cereals ranged from 2.5% to 2.75% before the introduction of GST, according to the finance ministry note reviewed by Hindustan Times.

The note has been prepared by the ministry to ascertain the impact of GST, two government officials said on condition of anonymity. Wheat, rice and flour attracted 2.5%, 2.75% and 3.5% tax respectively before July 2017. Tax rates on these essential items were slashed to zero after the launch of the GST regime.

Some opposition parties have criticised GST for its allegedly flawed implementation by the ruling National Democratic Alliance (NDA) and increasing the compliance burden on small businesses. The internal note tries to blunt the criticism by focusing on the savings accruing

GST collection 113,866

100,289 99,940 98,202 95,380 91,916

NEW DELHI: The Goods and Services Tax (GST) Council may eventually rationalise tax rates into fewer slabs in such a manner that items in the higher slab move into lower ones and certain goods and services enjoying lower rates shift to a

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higher slab, revenue secretary Ajay Bhushan Pandey said in an interview.

“GST rates are continuously reviewed... taking into account all relevant factors... As revenues stabilise at comfortable levels, the council may review {the system} to rationalise the rates into fewer slabs.”