• Dr. Thera Rajesh
• Makkina Upendra (Ph.D.)
• G.V.S. RavindraBabu

In September 2025, the Goods and Services Tax (GST) regime in India was significantly overhauled: multiple tax slabs (5%, 12%, 18%, 28%) were rationalised into a simpler structure — mainly 5% and 18% — with a separate 40% slab for luxury and “sin” goods. (The Times of India) This paper analyses the potential economic consequences of the reform on consumption, compliance burden, and government revenue. Drawing on estimates from government announcements, industry and credit-rating agencies, and early post-reform trends, we build two scenarios (base and optimistic) for fiscal year 2025-26. Our analysis suggests that lowered tax rates could stimulate private consumption, especially in consumer goods, durables, household items, and essential services — potentially providing a fiscal/consumption boost of up to ₹ 2.5 lakh crore. (Hindustan Times) However, the reform carries substantial short-term revenue risks: the official estimate of foregone revenue is 48,000 crore. (mint) The trade-off between consumption gains and revenue loss highlights critical considerations for fiscal stability, compliance, and long-term economic growth.

GST, Government revenue, Consumption, Post-reforms, Rationalisation

"Economic Consequences of India’s 2025 GST Simplifications - Impact on Consumption, Compliance, and RevenueIn September 2025, the Goods and Services Tax (GST) regime in India was significantly overhauled: multiple tax slabs (5%, 12%, 18%, 28%) were rationalised into a simpler structure — mainly ", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.12, Issue 12, page no.c636-c640, December-2025, Available :http://www.jetir.org/papers/JETIR2512273.pdf

"Economic Consequences of India’s 2025 GST Simplifications - Impact on Consumption, Compliance, and RevenueIn September 2025, the Goods and Services Tax (GST) regime in India was significantly overhauled: multiple tax slabs (5%, 12%, 18%, 28%) were rationalised into a simpler structure — mainly ", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.12, Issue 12, page no. ppc636-c640, December-2025, Available at : http://www.jetir.org/papers/JETIR2512273.pdf