'New GST rates may not burden govt', Pg 17.

Key Highlights:

• Crisil reports recent GST rate rationalization unlikely to burden the government.
• Government estimates a short-term annualised loss of Rs 48,000 crore due to GST rationalization.
• Previous fiscal's total GST collections amounted to Rs 10.6 lakh crore.
• GST Council decided to rationalise tax rates to a two-rate structure of 5% and 18%, effective from September 22.

Detailed Insights:

• GST simplification from four to two slabs may bring more goods and services under the formal net, supporting tax buoyancy in the medium term.
• Before rationalisation, 70-75% of revenue came from the 18% slab, 5-6% from the 12% slab, and 13-15% from the 28% slab.
• Reducing tax rates from 12% may not cause significant revenue loss; rates remain unchanged on fast-growing services like mobile tariffs.
• New services like e-commerce delivery are now under the GST ambit and taxed at 18%.
• Increased disposable incomes from mass consumption item benefits could drive demand and tax collections.

Key Concepts Involved:

• GST (Goods and Services Tax): An indirect tax levied on the supply of goods and services.
• Tax Buoyancy: Responsiveness of tax revenue growth to economic growth.
• Fiscal Burden: The financial strain or pressure on a government's finances.