The Electronics System Design and Manufacturing (ESDM) industry would receive a major boost with the introduction of GST in terms of attracting foreign investment and creating a level-playing field, an industry body said today.

"Once the GST is introduced, the total tax rates (for ESDM industry) will actually come down. So, it is something the industry is eagerly looking forward to," India Electronics and Semiconductor Association (IESA) President M N Vidyashankar said .

IESA is the trade body representing the ESDM industry in India.

A four-tier GST tax structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent that aims to lower tax incidence on most goods and keep out essential items was decided by a high-powered council yesterday.

"Our (ESDM industry) maximum rate (GST tax structure) is going to be around 18 per cent," he said but added that "It (GST tax structure) depends on the Council. One does not know".

"It (GST) will bring in an element of certainty. Today, there is lot of uncertainty. Competition between the states will be on an even keel (once GST is introduced)".

Earlier, states were engaged in one-upmanship to offer lower rates to attract investment but it would now be a thing of the past (once GST is in place). Now, comparative advantage like merit, resources and manpower, and a level-playing field would come into force. "It (GST) will introduce transparency and accountability," Vidyashankar said.

"It (GST) will give a major boost (to the ESDM industry in India), particularly in attracting investment from outside and promoting partnership and collaborations with Indian companies," he said.

Vidyashankar recently said investments up to ₹ 2 lakh crore are expected in India in the ESDM space within the next four years.

GST reform will lower tax incidence and create a level playing field, boosting investment appeal in ESDM sector. Introduction of GST is expected to lower overall tax incidence on the Electronics System Design and Manufacturing sector by consolidating state levies into a unified four tier rate structure, with the sector's maximum exposure likely aligned with the standard tier. The unified regime will reduce inter state tax competition, increase transparency and accountability, and improve certainty, thereby enhancing the industry's appeal to foreign investment and partnership opportunities.