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A 'silent tax'
Financial Express Lucknow
|September 12, 2025
GST reset may inflate tax costs on several merit goods and insurance, needs fixing
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After the announcement of the goods and services tax (GST) reforms, there is pervasive optimism about a spontaneous boost to consumption demand. But it is hard to miss a dichotomy between this expectation and the near-term (FY26) net revenue loss estimate of just ₹48,000 crore from these reforms. To be sure, that is just 2.3% of the gross GST mop-up excluding cess of ₹20.6 lakh crore in FY25. Apart from the revenue gains from a 12 percentage point increase in the GST rate on specified sin goods to 40%, and higher consumption, another factor that will apparently rein in the revenue loss is that refunds on account of input taxes could be much less in the new regime.
This story is from the September 12, 2025 edition of Financial Express Lucknow.
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