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Balm for consumers: Centre wants GST rate rejig to be gradual

Balm for consumers: Centre wants GST rate rejig to be gradual

Caught between the conflicting objectives of boosting revenue receipts and controlling a runaway inflation, the Centre may make a pitch for calibrated hikes in the goods and services tax (GST) rates over the next couple of years, rather than a one-time trimming of the slabs from four at present to three, according to a senior official.

This view will be conveyed to states, which are concerned about a possible drop in their tax revenues after June, when a five-year revenue cover for them will cease to exist. The Cenre’s road map for GST rate hikes will factor in the need to take the weighted average GST rate from a little over 11% at present to the estimated revenue neurtal rate of 15-15.5% over a two-three year period, but won’t give a shock to the consumers by way of sharp increase in rates.

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