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The recent rationalisation of GST rates is unlikely to pose a fiscal burden on the government, ratings firm Crisil said.In its latest report, the ratings firm said the government has estimated a net loss of an annualised Rs 48,000 crore in the short term on account of GST rationalisation.The total GST collections in the previous fiscal were Rs 10.6 lakh crore.Hence, the loss does not seem significant, the report said.The Goods and Services Tax (GST) Council recently decided to rationalise the tax rates and have a two-rate structure of 5 per cent and 18 per cent. The revision, to be effective from September 22, will reduce the prices of a large number of products and services.Live EventsThe GST simplification from four to two slabs can bring more goods and services under the formal net, which would gradually support tax buoyancy over the medium term, the Crisil report said.Before the rationalisation of the GST rates, the majority (70 per cent to 75 per cent) of the revenue came from the 18 per cent slab, it said.Only five per cent to six per cent of revenue came from the 12 per cent tax rate slab, and 13 per cent to 15 per cent from the 28 per cent slab.The ratings firm said that reducing tax rates on items from 12 per cent may not render significant revenue loss.Rates are unchanged on several fast-growing services like mobile tariffs.New services such as e-commerce delivery were brought under the GST ambit and will be taxed at 18 per cent.An increase in disposable incomes due to benefits on certain mass consumption items could further drive up their demand and tax collections, the report said.Add as a Reliable and Trusted News Source Add Now!
Producers passing tax changes onto the consumers is a key factor which would also determine the spending pattern of the latter, it added.(You can now subscribe to our Economic Times WhatsApp channel)
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(You can now subscribe to our Economic Times WhatsApp channel)Read More News onGST rate rationalisation IndiaCrisil report on GSTGST fiscal impactnew gst ratesGST effect on consumer demand(Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online….moreless
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