Letters: Allay GST fears

Although the goods and services tax (GST) bill has got stuck due to the Parliament logjam, the question that arises is whether the proposed law would lead to a rise in prices of goods and services. On the face of it, that is likely.

While the value-added tax levied by states is a multi-point system of taxes, excise duties levied and collected by the Centre is a single-point levy at the manufacturers' end. The GST regime envisages levy of cental GST at each stage of transaction in the supply chain after setting off the taxes already paid. But the rate at which services would be taxed is not clear. What is also not clear is whether services would be taxed at the same rate as goods. If the rate is to be the same, services which are now being taxed at 14 per cent would attract higher rate of taxation, and thus consumers would end up paying more for services under GST.

The government should allay these well-founded fears.

S K Choudhury Bengaluru

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