how prices will reduce by implementing GST

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Yashwanth Mandavilly (Querist)

25 July 2016 My doubt is that if gst is implemented and the "rnr"of 18.5% is charged on good or services how will the prices reduce and end consumers get benefit. don't say that many taxes are being subsumed by gst because even if all the duties and taxes are added up on a standard product it will still be less than 18.5% for example service tax now 15% arey gst 18.5%

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Amol S Joglekar

Amol S Joglekar (Expert)

25 July 2016 GST is looked upon as single point tax.....so if you study the value chain of various products....the ratio of price of manufacturer to price for consumer is at time more than 1.75 times...... ( to name a few for your own working are maruti car, washing machines, vegetables, medicines etc.)
with GST it is expected to be around 1.4 to 1.5 times and thus there could be a saving of 30 to 35 % in the value chain.
Now the interesting point to be noted is to see how much of it is actually passed on to end customer.......

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