The Goods and Services Tax (GST) is on schedule for implementation from July 1 and will not lead to any significant increase in prices of goods although cost of some services may see a marginal hike, Finance Minister Arun Jaitley said today.

Addressing the CII-Kotak investors’ round table here, Jaitley said that the GST Council will in the next few days finalise the rates of tax for different goods and services and the country is on track to roll out the simplified indirect tax regime from July 1.

“The current indirect tax structure in India is fairly complicated...those who transacted in either goods or services would have to deal with multiple authorities.

“The whole country was divided into multiple markets. So a free movement of goods and services was not possible. Now, the idea of GST was that let there be just one tax in the country,” Jaitley said.

He added that tax rates on goods may go down marginally under the new indirect tax regime while services may see some increase.

“As far as goods is concerned, the tax is not likely to increase at all. If at all, it may marginally come down because of the cascading impact not being there and therefore, it is not likely to be inflationary.

“As far as services is concerned, obviously, they will go up marginally and therefore, there will be some impact on this. So, goods and services may react a little differently,” Jaitley said. Asked if GST would stoke inflation, he said: “I don’t anticipate this to happen significantly. If at all, this may be a transient impact.”

“Hopefully, from July 1, one of the largest tax reforms in India since Independence — a simpler, more efficient and cleaner taxation system would be introduced in the country which itself would ease the very processes of doing business,” he said.

Related Topics