An Indian consumer goods trader shows letters GST representing "Goods and Services Tax" (GST)at his shop in Hyderabad on August 3, 2016.
Finance Minister Arun Jaitley said India was on the cusp of its biggest tax reform since independence ahead of a vote in parliament later August 3, on a new national sales tax. The Goods and Services Tax (GST) will replace a patchwork of central and state levies on goods and services and is one of Prime Minister Narendra Modi's biggest reforms since taking power in May 2014 . / AFP PHOTO / NOAH SEELAM
The goods and services tax (GST) can boost India’s GDP growth by up to 4.2% — double the previous estimate — as lower taxes on manufactured goods will bump up output and make products cheaper, a U.S. Federal Reserve paper said.GST, it said, could reduce inefficiencies in the production process while eliminating the current compounding effect of different central and state levies.
Dubbed as the biggest tax reform since Independence, GST will unify at least 10 indirect taxes into one to be collected at State and central levels.