CHENNAI: State Bank of India’s research wing has estimated that the recent GST reforms, including rate reductions, will lead to a revenue loss of only about Rs 3,700 crore — far lower than the government’s projected loss of Rs 48,000 crore.
The reforms, approved by the GST Council on Wednesday, introduce a two-tier tax structure aimed at simplifying compliance and reducing the burden on consumers and businesses. According to SBI Research, the move is likely to be growth-accretive, boosting consumption while keeping fiscal risks in check.
The study also notes that the new structure will benefit the banking and financial sector by improving cost efficiencies. Lower indirect tax costs on inputs and services are expected to translate into operational savings for lenders, strengthening margins and competitiveness.
Analysts believe the sharply lower revenue loss projection suggests that the government will have more fiscal space than initially anticipated, while the broader economy could see gains from higher demand and improved credit flow.