New Delhi, Aug. 18 -- The fiscal cost of the government's proposed Goods and Services Tax (GST) rate rationalisation will remain manageable, according to a UBS report, which estimates the revenue loss to be about Rs. 1.1 trillion annually, or 0.3 per cent of GDP.

For the financial year 2026, UBS noted that the estimated revenue loss of Rs. 430 billion (0.12 per cent of GDP) would be offset by surplus cess collections and a higher-than-budgeted dividend transfer from the Reserve Bank of India.

The report highlighted that a cut in GST has the potential to create a stronger impact on consumption compared with personal income tax or corporate tax cuts. This is because GST directly affects spending at the point of purchase. Citing a study by...