Bengaluru, Nov 4: The four-tier tax structure decided by the Goods and Services Tax (GST) Council on Thursday received a mixed response here, with the common man hoping that prices would not go up further, if not declining, when the new rates are implemented.
"If essential goods, including food items, will be tax free, will they become cheaper than they are now for a common man like me? How will the government reduce the difference between wholesale and retail prices, which vary between 75-100 per cent," asked Krishna Rao, a retired official.
Echoing Rao, S. Krishna Swamy, a college lecturer, wondered if the GST regime would control food prices at the retail level, as items of mass consumption, especially vegetables, fruits, pulses and grains depend on supply-demand chain.
"As a middle class citizen, I hope the cost of living will be bearable, especially in Bengaluru, where many things are expensive compared to other cities. It is early to give opinion on the benefits of the GST regime unless we see their impact on our purchasing capacity," said Swamy.
Announcing the four slabs of tax rates in New Delhi earlier, Union Finance Minister Arun Jaitely said common use items would be levied at 5 per cent, while most of other items would be taxed at 12 per cent and 18 per cent and white goods at 28 per cent as against the current 30-31 per cent, including excise duty and VAT.
"Frankly speaking, I am not aware of the rates at which many goods and services are taxed as they vary on item to item and from state to state. If the new rates under the GST make them reasonable and affordable, I will be happy as it will benefit the common man. I can assess better if I get details of the new rates," said P. Jayalakshmi, a post-graduate higher secondary school teacher.
On imposing a whopping 40-65 per cent tax on luxury goods like high-end cars, pan masala, aerated drinks and tobacco products, oncologist U.S. Vishal Rao told IANS that higher levies on all forms of tobacco would help the addicted consumers from giving up the dreaded habit of smoking and chewing it.
"Studies the world over have proved that heavy taxation is the most effective tool in containing tobacco consumption in all forms though they have been least utilised in developing countries," claimed Rao, who is a member of the Karnataka high-power committee for tobacco control.