New Delhi, Sept. 4 -- The long-awaited overhaul of the Goods and Services Tax (GST) is finally here. By lowering tax rates on mass-consumption items, GST 2.0 is expected to give a boost to domestic demand. But it also comes at the cost of revenue loss, at a time when the government's tax collections are already under strain.

Mint examines whether the anticipated buoyancy in demand can offset the dip in tax receipts or if the government will be forced to rein in spending to meet its fiscal deficit target.

Quite significant. Most of the shortcomings of GST 1.0 have been addressed. The number of rate slabs has been cut from four to two (5% and 18%), with a 40% levy reserved for sin goods. Crucially, items of mass consumption are now taxed ...