New Delhi [India], September 5 (ANI): The Central government is projected to face a revenue shortfall of Rs 10,664 crore in Integrated Goods and Services Tax (IGST) receipts due to the recent GST rate rationalisation, according to an analysis by the Global Trade Research Initiative (GTRI). At the same time, industry leaders across sectors have welcomed the reforms—dubbed GST 2.0—as a catalyst for growth, affordability, and long-term sustainability.
The GTRI report provided a detailed assessment of how revised GST rates on imports will affect government revenues. It noted that India’s merchandise imports in FY2024-25 were valued at USD 721.2 billion, with the latest revisions directly covering goods worth USD 88.78 billion, or 12.3 per cent of the total import base.
Goods worth USD 55.2 billion have seen tax cuts, reducing IGST collections from Rs 92,280 crore to Rs 42,956 crore and causing a revenue loss of Rs 49,324 crore. Conversely, tax hikes on goods worth USD 33.5 billion are expected to raise IGST inflows from Rs 21,923 crore to Rs 60,590 crore, yielding a revenue gain of Rs 38,660 crore. The combined effect shows a net shortfall of Rs 10,664 crore.
While the report highlighted that these figures only capture the impact on imports, it stressed that IGST collections—accounting for nearly one-fourth of total GST revenues—are a strong indicator of broader economic implications. However, the lack of publicly available product-level domestic GST data limits the ability to gauge the full revenue picture.
Despite the projected shortfall, industry stakeholders have largely hailed the reforms as transformative. In real estate, the reduction of GST on construction materials such as cement and steel is seen as a major boost. “Lower input costs will allow developers to invest more in superior design, modern amenities, and sustainable practices, while ensuring greater affordability for homebuyers,” said Snehdeep Aggarwal, Founder & Chairman of Bhartiya Group.
The reforms also bring significant relief to the corporate transport sector, with GST on commercial vehicles slashed from 28 per cent to 18 per cent. “By reducing GST on commercial vehicles, more driver-partners will find it viable to purchase ICE vehicles at lower EMIs, boosting their earnings and livelihood security,” said Sriram Kannan, Founder & CEO of Routematic.
In the electric vehicle (EV) segment, the government’s move to keep all EVs—across segments—within the 5% GST slab without any additional cess is being praised as a progressive step to accelerate adoption. “This will have a significant impact on market growth,” said Vasudha Madhavan, Founder and CEO of Ostara Advisors.
Tax and regulatory experts also welcomed the simplified three-rate GST structure and streamlined processes. Subroto Bose, Partner at ASA & Associates, remarked, “The recommendations will have a huge positive impact on consumption and production. Simplified GST registrations and risk-based provisional refunds will reduce bottlenecks and facilitate trade.”
Thus, while the GTRI analysis underscores a near-term revenue challenge for the government, industry leaders believe GST 2.0 will strengthen affordability, spur investment, and set the stage for sustainable economic growth. (ANI)
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