Moody's: GST reset to lower govt revenues

NEW DELHI: A decline in effective GST rates will likely boost private consumption and support growth at a time when India faces external pressures from higher US tariffs. However, the loss of tax revenue may limit progress in fiscal consolidation and debt reduction, Moody's Ratings said on Tuesday.

The GST reform is another form of fiscal policy support for households, complementing the higher income tax thresholds introduced in Feb.


"We expect that the tax savings from the GST revisions will be largely passed on to consumers through lower prices, strengthening private consumption, which recorded a strong quarter-on-quarter increase in real terms in the three months through June 2025," said Moody's Ratings in a report. tnn