Former Economic Affairs Secretary Shaktikanta Das has said that apprehensions of prices rising post the Goods and Services Tax (GST) are "misplaced" and initial hiccups in its implementation will be sorted out in the next 2-3 months, according to a PTI report on Sunday.
Das noted that people are looking at an increase in prices of goods and services on which taxes have been hiked. However, they are not seeing the input tax credit which has been made available to the industry, he said, and urged people to look at the tax reform holistically, the report said.
GST has subsumed all indirect taxes including VAT and octroi into single tax nationwide. It has been adopted by all states barring Jammu and Kashmir. Das further said, "The other side of the story is that input tax credit will be available. That will have a moderating impact on the so-called increase in tax rate."
Under the input tax credit facility, the industry is taxed not on the purchase of raw material but on value-added products.
"Therefore, the increase that people are talking about is not that much. You need to see the whole basket. You cannot pick up 5 items and say prices have gone up," he elaborated.
On concerns about glitches in GST rollout, PTI quoted Das as saying, "Any new system will have implementation issues. I think in a matter of 2-3 months, the glitches and hiccups are likely to come up. They will all be resolved."
He said that the industry could face problems in filing tax returns or may commit mistakes and not able to avail input tax credit and remain confused over applicable tax rates on various commodities, among others.
"Problems like this are bound to happen. Going forward, everything will get streamlined," he said.