Government to educate people and companies on how GST would decrease prices

In a bid to ensure no wrong message reaches India Inc, the government is planning to call companies from specific industry groups. They will be informed that GST, which is all set to be rolled out from July 1, would actually decrease the tax burden. Earlier various companies has alleged that GST seem to be on higher slab than expected.

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"A lot of effort has been made to keep tax rates neutral or lower them under GST,, a senior finance ministry official told ET. "We believe prices should come down... We would be calling companies in groups to understand if they have any issues,” he added.

"Tax incidence should not increase as companies will now have the advantage of input tax credit that they did not have earlier,” the official informed the financial daily.

The government is also planning to do an outreach programme to educate people about how prices would drop after GST is rolled out. The government has also said that the taxes on daily commodities like tea, sugar, coffee and services such as direct-to-home (DTH) service would be decreased.

There are now four slabs of taxes: 5%, 12%, 18%, 28%. There will be an added cess for luxury items and tobacco. Most food grains have been exempted and processed food items will be taxed 5%.