A Nomura report has said that the implementation of Goods and Services Tax (GST) is likely to be fiscally neutral and its impact on inflation is expected to be less than 20 basis points. According to the Japanese financial services major, the GST council is making steady progress and is expected to be implemented in the July-September quarter this year.
As per reports, though the impact of GST is likely to be minimal, growth numbers are expected to get affected in the run up to its implementation. Commenting on the issue, a Nomura Official told the media, "In the near term, we expect the GST to be fiscally neutral, the resulting inflation impact to be minimal at less than 20 basis points and the impact on growth to be marginally negative in the run up to its implementation." "Over time, we expect the elimination of cascading taxes and its simplified tax structure to boost productivity, lower costs, aid in the formalisation of the economy and result in large revenue benefits for the government," he added.