GST may not lead to inflation if tax rate is about 18%: CAIT

TIL Desk/Business/New Delhi-The standard tax rate near 18 per cent under GST will prove to be an ideal one and in all probability, will not stoke significant inflation as assumed by many, the Confederation of All India Traders (CAIT) on Sunday said.

However, finalisation of the tax rate depends much on the classification of goods and services under the exempted category, and also under nominal tax rate, which may be one per cent, CAIT said.

CAIT national President BC Bhartia and Secretary General Praveen Khandelwal said under the current VAT regime, items placed under the the 5-per cent tax slab will be attracting standard rate of tax, which may be 18 per cent, and it is feared such a situation will lead to inflation.