Effective GST Rate Falls To 10.84% As Tax Base Widens, Revenue Grows
NDTV Profit 1 hr ago·8 Oct 2026, 4:40 pm
India's effective Goods and Services Tax (GST) rate has dropped to 10.84% for the current fiscal year. This decline occurs as the tax base expands, with the value of taxable supplies increasing by 25.8% compared to the previous year. Despite the lower rate, the government has reported a 11% growth in total GST revenue, indicating that a broader range of economic activities is now being captured under the tax net.
For investors, this data signals a maturing tax system that is becoming more efficient. A widening tax base suggests the economy is becoming more formalized, which can improve long-term fiscal health. The fact that revenue is growing even as the rate falls implies that compliance is improving and the tax net is covering more sectors. Investors should monitor upcoming budget announcements to see if the government plans to use this surplus for infrastructure spending or tax cuts.
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