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The Central government may lose around Rs 10,664 crore in Integrated Goods and Services Tax (IGST) revenues after the latest round of GST rate rationalisation, according to an assessment by the Global Trade Research Initiative (GTRI).
Major automakers including Tata Motors, Mahindra & Mahindra, and Renault India have announced price cuts across their passenger vehicle portfolios after the Goods and Services Tax (GST) Council slashed rates on cars and auto components earlier this week.
In order to pass on the GST rate cut, Mahindra & Mahindra on Saturday announced a price reduction of up to Rs 1.56 lakh on sports utility vehicles (SUVs) like Scorpio, XUV700, Thar and Bolero.
GST exemption on insurance is estimated to cost ₹9,900 crore, sources said. States cautioned that insurance companies should not make windfall gains.
The GST rate rationalisation is expected to soften the price of thermal coal, which accounts for more than 70 per cent of India’s power generation. This is a move that will reduce cost of power generation.
At its 56th meeting, the GST Council announced sweeping rate reductions across a range of goods and services. However, coal stood out as one of the few exceptions.
Apparel industry players have raised concerns about the increase of GST rate on garments priced above ₹2,500 from 12 per cent to 18 per cent.
The complicated GST slabs that gave headaches to small traders after the flagship tax overhaul came into effect, was cleaned up by the government today, leaving only two slabs — 5 and 18 per cent.
Stakeholders in the arecanut sector have asked the Government to bring down GST on copper sulphate, which is used as a fungicide in many plantation crops, to 5 per cent from the existing 18 per cent.
Deutsche Bank said while the GST rates rationalization can come as a useful offset to the tariff-related downside risks to growth. However, it also stated that it is too early to adjust its long-held 6.5 per cent year-on-year (y-o-y) growth forecast for FY26 and FY27.