Implementation of Goods & Service Tax (GST) will lead to increased tax compliance and attract more foreign direct investments across sectors due to tax transparency and ease of doing business, says a survey.
According to a survey of corporate India by Feedback Business Consulting Services, which covered 67 companies from various sectors, GST rollout will be positive for the economy.
Around 72 per cent respondents felt investments will rise across sectors and a significant portion of this will come in the form of FDI especially in heavy engineering and automotive sectors.
Some of the other major benefits of GST implementation include, reduced logistics cost, supply chain efficiency, reduction in costs for tax & regulatory compliance, better penetration of markets and export effectiveness.
However, companies are concerned about the timing of implementation of GST and fixing of rate at which tax will be charged, the survey said.
“There might be some heartburns like inflation in the early days of implementation but GST will improve GDP of the country in the long run,” it added.
The report mentioned that states where the goods and services are consumed will benefit more as GST is consumption-based tax and not production-based. “This may be a cause for concern for unorganised states,” it said.
The survey was initiated immediately after the passage of GST Bill in parliament and the response were collated by 31st August.
The response were later analysed through Statistical Package for the Social Sciences, a software package used in statistical analysis of data, to draw inferences.