The Goods and Service Tax (GST) will not fuel inflation in India unlike in other countries as India is moving from multiple taxes which had cascading effect to a single tax regime, Revenue Secretary Hasmukh Adhiya said on Tuesday.
Briefing media at a GST Conclave here, he said the final price of goods will be much lower under the GST regime as a large segment of small retailers will either be exempted from paying any tax or will have to pay at a very low rate.
“It is wrong to say that GST will have inflationary impact as we are moving from a multiple tax regime to a single tax whereas the other countries of the world moved from single point tax to multiple tax regime which had a cascading impact,” Adhia said ahead of government’s plan to roll out the indirect tax regime from July 1, 2017.
He said there will be no separate taxes. It will be only one GST on goods and services. The GST has unified Centre and state taxes. The inter state movement of goods will attract Integrated GST but the input credit for that will be given to the trader.
Adhia said there will be IGST on imported goods too and it will help local product competitiveness. Besides, the proposed GST will boost government’s Make in India programme.
“All imported goods will be charged IGST which is equivalent to Central GST and State GST. This will bring equality with taxation on local products,” the secretary said. He, however, said that customs duty has been kept out of GST and it will remain as earlier.