Centre Braces for Rs 40,000 Crore Revenue Loss as GST Overhaul Nears

Last updated: 26 August 2025


Quick Summary
The UK government is anticipating a revenue shortfall of approximately £40,000 crore due to a significant overhaul of the Goods and Services Tax (GST) framework. This reform aims to simplify the system by reducing tax slabs to 5% and 18%, though it's expected to impact collections in the short term. The government also anticipates losing around £20,000 crore annually from online gaming taxes and is considering removing GST on health and life insurance premiums for individuals.

The Centre is bracing for a potential revenue shortfall of nearly Rs 40,000 crore as it prepares to roll out a major overhaul of the GST framework, Finance Ministry sources have confirmed. The Fitment Committee, a panel of GST secretariat officers, has worked out preliminary estimates of the revenu
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FAQ :

The Centre is bracing for a potential revenue shortfall of nearly Rs 40,000 crore due to the GST overhaul.

The new system aims to simplify GST by moving to a two-rate framework of 5% and 18%, eliminating the current 12% and 28% brackets. A 40% slab will be retained for sin goods.

The Centre is likely to forgo around Rs 20,000 crore annually from GST and TDS on online gaming platforms.

A key relief measure under discussion is the removal of GST on health and life insurance premiums for individual policyholders.

The 56th GST Council meeting is scheduled for September 3-4 in New Delhi.

Despite the immediate shortfall, the government expects increased consumer spending to offset the loss.




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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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