Kolkata, Aug 23 (IANS) The rate of Goods and Services Tax (GST) at 18 per cent would be “revenue neutral”, CII president Naushad Forbes said on Tuesday.
“The maximum rate around 18 percent would be fine. The intension of GST is not to either increase or decrease the total amount of taxes collected from goods and services transaction.
“GST rate at 18 percent would be a good revenue neutral rate. And it would not be so high that it would damage the consumption of goods, markets for goods and be inflationary,” Forbes said.
The Confederation of Indian Industry President also said this would lead to a increased collection of taxes as it is the right rate from consumption and long term tax buoyancy perspective.
“As more and more inclusion at the modest rate will end up with a rapidly growing tax revenue,” he said, adding a rate beyond 18 percent would have an immediate impact on demand.
GST has the potential to add 1.5-2 percent to the annual GDP growth, he said.
It is spoken about that the 18 percent rate would translate to about 12 percent and 6 percent rate between centre and the states but it is still being worked out and will be decided by the GST council, he added.