GST, Modi Government to cushion impact of hike in service TAX

The government will try and cushion the impact of the goods and service tax (GST) on services in case of an increase in the levy after the implementation of the tax reform measure, government sources said. The government currently imposes a service tax of 14.5% but the GST rate is expected to be higher with states such as Kerala seeking a rate of over 20% to ensure that they do not lose revenue in the new tax regime. A committee under chief economic adviser Arvind Subramanian.