Much of the discussion on the potential impact of the goods and services tax (GST) on inflation has tended to focus on the rise in headline Consumer Price Index (CPI).

But, as the increase in tax rates will vary across product categories, the actual impact on the end-consumer will depend on the composition of his consumption basket. Assuming the revenue neutral rate (RNR) works to be around 17-18 per cent, a standard rate of 22 per cent, with a lower rate of 12 per cent for some items and a higher rate of 35 per cent for others, the sharpest tax increases are expected in categories such as ...