Chief economic adviser (CEA) Arvind Subramanian on Wednesday hinted at further rationalisation of the five-tier goods and services tax (GST) structure and said the GST Council’s decision last week to prune substantially the list of items under the highest rate bracket won’t affect the Centre’s fiscal position much.
The rate cuts will also have a salutary impact on retail inflation, said Subramanian. “I haven’t done any calculations but some estimates suggest a reduction (in Consumer Price Index-based inflation) of 20-40 basis points, and that sounds plausible,” the chief economic adviser told CNBC TV-18.
Retail inflation touched a seven-month high of 3.58 per cent in October. Fewer slabs, bringing more items under the new indirect tax structure and further simplifications are going to be considered by the GST Council in the coming months. FE