- Government plans to reform GST to a two-tier structure
- Proposed changes may cost over Rs1.2 lakh crore annually
- States could face losses of 0.3 percent of GDP
- Centre may propose sharing new cess with states
- States rely heavily on SGST for revenue
- States with high SGST dependency include Bihar, Gujarat, West Bengal, Karnataka, Uttarakhand
- Andhra Pradesh, Chattisgarh, Madhya Pradesh, Telangana have low SGST dependency
- GST forms a significant part of states’ revenue
- States’ fiscal deficit/GDP is 3.2 percent in FY25P
- States’ tax revenue growth is weak
- GST rate rationalization may increase fiscal pressure on states
- Centre aims to implement dual-slab GST structure by September 2025
- Most items in 28 percent slab to move to 18 percent
- Most items in 12 percent slab to move to 5 percent
Source: deccanchronicle.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
