Is there a Need for Revision in the GST Rates?
The Central Government of India keeps on revising the GST rates in specific periods. But still, there are many goods and services on which there is a need for revision in GST rates.
- Processed foods and beverages attract around 12 to 18% of GST, which includes milk packets as well as some essential processed food items. There is great demand as well as a need for processed food and beverages in India and thus there is a need for revisions in GST rates.
- The GST on luxury items such as Cigarettes and liquors can be further increased. Also on the luxury clothing and accessories.
- The GST rates of LED lamps and solar water heaters are also around 18%, which can be reduced as these items need to be promoted to shift towards a greener environment.
Impact of GST on Inflation
GST was introduced in India to waive off indirect taxes on all goods and services and introduce a single direct taxation system, which will lower the prices of essential goods and services. But it seems like it didn’t happen, as of now in 2022, it’s more than 5 years after the launch of GST in India. Within 1 year of the launch of the GST, the CPI inflation increased from 3.66% to 4.24%. However many economists believe that an increase in the CPI in the initial phase was obvious and it aimed to maintain inflation rates for the long term.