Bangalore: Industry body ASSOCHAM on Thursday said the Goods and Services Tax (GST), likely to be introduced next year, would lead to buoyancy in government revenues by 1.5 lakh crore and increase the GDP by 1.4 to 1.6%.

Sales staff at a jewelry shop wait for customers, in New Delhi. (File photo Bloomberg)

“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 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% with net revenue jumping by 1.5 lakh crore a year", said the ASSOCHAM study.