However, the government seems to have seen reason in trying to keep the initial GST rate at not more than 18 percent. This concession is vital or else the whole point of GST would have been lost. Service taxes, raised in this year’s budget, have already slowed down demand; another ratchet-up to 18 percent will make things worse – and result in cost-push inflation. But one can at least grin and bear the short-term shock for the long-term good of the economy. Depending on how it is implemented, the GST rate should start trending downwards after the initial years of implementation and increasing the taxpayer base.