SOURCE :- SIASAT NEWS
Hyderabad: A study by the Centre for Economic and Social Studies (CESS) predicted that the proposed GST 2.0 could reduce the effective tax burden on households in Telangana.
However, it could limit the impact of rising prices rather than putting large amounts of extra money into consumers’ hands.
The study estimates that Telangana households could see their effective GST burden fall from 5.4-10.4 per cent in 2023-24 to 3.9-7.1 per cent under GST 2.0.
Food could get the biggest GST relief
Food is expected to see the largest benefit from the proposed changes. CESS estimates that the effective GST rate on food in Telangana could decline from 2.2-7.4 per cent to 0.9-3.4 per cent.
Processed food could see a particularly sharp reduction. Its average GST rate is expected to fall from around 13 to 4-5 per cent.
However, food prices have already increased by nearly 17 per cent.
GST burden expected to fall across income groups
The projected reduction is not limited to a particular income group.
In rural Telangana, the effective GST rate for the lowest-spending households could fall from 5.4-10.4 per cent to 4-7.2 per cent. For the highest-spending households, it could decline from 5.5-11 per cent to 4.1-7.5 per cent.
In urban Telangana, the GST burden for the lowest-spending households is projected to decrease from 4.8-9.5 per cent to 3.4-6.3 per cent.
For the highest-spending urban households, the rate could fall from 6-10.5 per cent to 4.4-7.2 per cent.
Female-headed households are also expected to see a lower GST burden.
Their effective GST rate could decline from 4.9-9.5 per cent in 2023-24 to 3.3-6.1 per cent under GST 2.0.
CESS said the impact of GST 2.0 should be viewed mainly as a partial protection against inflation rather than an assurance that household expenses will fall.
SOURCE : SIASAT
