GST to bring down prices of goods
With Indian economy integrating with world markets, manufacturers have to compete within and outside the country. To get a competitive edge, the introduction of GST would be a crucial reform to remove cascading of taxes, leading to reduction in prices of most manufactured goods by about 10 per cent, it said in a release here.
Once GST replaces all multiple taxes, it is going to be the biggest tax reform in independent India`s history, it said in a recent study titled `GST, Beyond Growth.` A simplified tax structure would lead to annual savings of Rs 1.2 lakh crore at the current nominal rate of GDP. Reduction in tax cost would lead to a favourable impact on tax compliance, economies of scale, supply chain efficiencies and thus higher economic growth, it said.
"The tax GDP ratio too may go up by 1.5 to 2 per cent with net revenue jumping by Rs 1.5 lakh crore a year", said the ASSOCHAM study. "The GST will create a single Indian common market and there will be no distinction between goods and services with seamless input tax credit allowed throughout the supply chain".