File GST Returns with ClearTax to avoid errors and save time
Easy-to-use software that ensures 100% accuracy and complianceStart Free Trial
Businesses have made their GST calculations, and are not entirely sure if the new tax will lower prices. Much depends on the Council's decision this week.
May 18th, 2017
Even though the final rates on goods and services will be known only by the end of this week, many manufacturers have already made their own calculations and are devising their future strategies based on these projections. Goods such as washing machines and air conditioners, which are currently taxed at 23-24% might get taxed under the highest bracket of 28%, thus increasing the tax incidence. This follows the logic that goods that fall between two tax slabs will be taxed at the higher rate. While the government is trying its hardest to not increase taxes on articles of common use, many manufacturers expect that their tax burden might just go up a notch, post the July 1st deadline. On the other hand, a pick-and-choose policy will only increase the tax complexities in the new regime; something that the authorities wish to avoid
The anti-profiteering clause and free flow of ITC may help bring down prices, but these policies will take a while to kick in, say experts.
As reported in Times of India