Gains from the goods and services tax (GST) in its current form will be “far less than initially envisioned” as the structure is fairly complex with multiple tax rates, says a Nomura report.
The GST as proposed has a multiple rate structure as almost all goods and services have been classified into groups attracting GST rates of 5, 12, 18 and 28 per cent, respectively.
In addition, four items (namely luxury cars, aerated drinks, tobacco and related ‘paan’ products) will attract separate cesses each.
“The GST as proposed is fairly complex with multiple tax rates (across different categories and even within the same category) in order to minimise the inflation impact and due to political considerations,” Nomura said in a research note.
via GST: GST gains to be ‘far less’ than initially envisioned: Nomura – The Economic Times
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