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GST Rollout: Divided Rate Structure May Complicate Services
May 25, 2017
The GST council has approved a four-rate structure for good and services which are 5%, 12%, 18% and 28%. A total of about 120 services have been assigned their respective tax slabs, in which the headline rate for most including financial services and telecom is expected to increase to 18% from current 15%.
Although GST is designed to make the current taxation system simpler and easier, analysists are concerned that its multi-tier structure may actually not solve the problem as expected. For instance, renting of hotel rooms, and using restaurant services may become complicated. Another concern is the banking industry, which has started charging a variety of fees for their services, and at the new 18% GST the common man will be financially hurt.
