Fitment panel's GST recommendations may cause immediate spike in inflation

The 5% tax rate broadly covers most food items, so an increase here would directly impact the monthly grocery budget of households

The fitment committee consisting of central and state officials, recently recommended increasing the GST rate of five per cent to seven per cent, and the 18 per cent rate to 20 per cent in order to raise additional resources.

The proposal would be discussed by the group of ministers (GoM) headed by Karnataka chief minister Basavaraj Bommai and then taken up by the GST Council. While many were looking at a merger of the 12 per cent and 18 per cent rates to about 15 per cent, the recommendations of the committee were in fact to raise the rates. However,