GST to make essential goods prices fall: VAT panel chief  

States today said the Goods and Services Tax will reduce prices of essential goods, which have been on upswing, even as the new tax rate is yet to be worked out.

"Overall burden of GST (Goods and Services Tax) on price of essential commodities will fall. The incidence of burden of tax on the price of the commodity will fall. We want this to fall particularly in the case of essential goods," VAT panel chief Asim Dasputa said today after a meeting of the Empowered Group of state finance ministers on GST.

He said this will happen even as many states along with the Union Government will gain from the proposed GST.

"Only very few states will be losing, many states will be gaining in a very significant manner. Government of India will also gain if revenue neutral rates are properly worked out," he said.

Prices of the essential commodities have been rising despite wholesale inflation being in the negative zone for the 10th week in a row. Analysts said these items will further become expensive as the impact of erratic monsoon becomes clear and the Centre's move to raise minimum support prices of paddy and pulses.

That way, Dasgupta's remarks on the impact of GST on prices of essential commodities would bring some relief to the common man.

Source : SamayLive, India,  dated 22/08/2009