New GST Rates Likely by Dussehra as Revenue Shortfall Looms
The government is preparing to revamp the Goods and Services Tax (GST) structure by Dussehra. The new plan includes two primary slabs of 5% and 18%, along with a 40% levy on luxury and sin goods. The proposal will be discussed in the upcoming GST Council meeting in early September, with implementation likely around the festive season.
Revenue Impact Anticipated
Officials estimate a revenue shortfall of nearly ₹40,000 crore for both Centre and states due to the reduced rates. In addition, a crackdown on online gaming is expected to further reduce GST and TDS collections by about ₹20,000 crore.
Boost to Consumption Forecast
Economists believe the revised structure could spur significant consumer spending. SBI Research projects a potential rise in consumption worth ₹1.98 lakh crore, though it may result in an annual revenue loss of up to ₹85,000 crore.
Industry and States Respond
Trade and business groups have welcomed the reforms, urging the government to ensure quick implementation before festive demand peaks. However, some states remain cautious. Karnataka has flagged an estimated ₹15,000 crore revenue loss and called for central compensation to offset the impact.
