A report has said that GST benefits are likely to accrue over time rather than immediately, though in the long run the indirect tax regime will boost growth, lower costs and strengthen tax revenues.
According to Japanese financial services major Nomura, Goods and Services Tax (GST) is likely to be fiscally neutral in the near term, while in the long run the benefits are expected to be 'substantial'.
Commenting on the issue, a Nomura Official told the media, "Currently, proposed version is quite complex due to multiple tax slabs and because coverage is narrow. Therefore, we expect the benefits from GST to accrue over time, rather than immediately."
"Over time, as the GST council widens the tax net, minimises the tax slabs and lower the standard tax rates, we expect the benefits to be substantial," he added.
As per reports, the GST Council has agreed on a 4-tier GST tax structure of 5, 12, 18 and 28 per cent, with lower rates for essential items and the highest for luxury and demerit goods that would also attract an additional cess.