6 reasons you need not fear the GST regime

The goods and services tax (GST) is set for a July 1 launch. While businesses have adjustments to make, consumers do not have much to worry about, apart from some possible disruption in supply. ET explains

1) MANY RATES
Pundits say multiple rates have distorted GST, but consumers are gainers

WHAT IT MEANS
GST rates will be as close as possible to earlier effective rates

2) NO REVENUE GAIN FOR GOVT
The government expects a net revenue loss from GST. Increased compliance could make up for this

WHAT IT MEANS
On the whole, tax incidence will go down for the consumer

3) EXEMPT GOODS
Items and aam aadmi goods exempt or pegged at lower rates

WHAT IT MEANS
The common consumption basket is not likely to get any more expensive

4) SERVICE TAX RATE UP BUT EFFECTIVE TAX LOWER
Service tax rate will be higher under GST, but service providers will also get input tax credit for VAT and cascading of taxes will disappear

WHAT IT MEANS
Even if rates are higher, end prices for consumers may not go up

5) STABLE RATES
Neither the Centre nor states will be able to raise rates easily

WHAT IT MEANS
Tax rates will remain stable

6) BIG BROTHER WILL BE WATCHING
An antiprofiteering body is being set up

WHAT IT MEANS
If any business does not pass on benefits of lower taxes to consumers, it can get into trouble