GST to have minimal impact on retail inflation: Morgan Stanley

New Delhi: The implementation of the Goods and Services Tax (GST) is expected have a minimal impact on the consumer price index (CPI) basket, as tax rates for items in the CPI basket are expected be to lower under the GST in comparison with the current levy, according to a report by Morgan Stanley. The report further stated that the final impact on underlying inflationary pressures will likely depend on the trends in aggregate demand and output gap after the implementation of GST. The impact of GST is expected to be positive for sectors like consumer staples, media, cement and steel, and negative for airlines and oil and gas. Whereas impact on auto, hotels and telecom sector is expected to be neutral or marginally negative.