With the 15th Finance Commission recommending the merging of the 12 per cent and 18 per cent tax rates, the Good and Services Tax (GST) Council is set to take up the proposal in its next meeting in March. The rate rejig, analysts say, will alter the tax burden on companies, which they expect to get passed on to the consumers. However, those at Nomura caution that the pass-on effect may be limited as the overall demand scenario remains challenging. “In general, the companies will pass on / reduce the burden of higher / lower taxes. However, the falling or rising of taxes impacts demand and pricing power of companies. It is possible that a part of the tax reduction / rise may not be passed on due to the demand scenario,” wrote Mihir P. Shah and Abhishek Mathur of Nomura in a February 22 co-authored note.