Indirect tax share in GDP at all-time high of 10.5%

Experts say higher taxes could be one of the reasons for a demand slowdown in economy

Krishna Kant  |  Mumbai 

There has been a steady rise in indirect taxes (net of subsidies) in recent years, pushing up retail prices of commonly used goods and services. The combined share of Customs and excise duties, service tax, and value-added tax (VAT) in India’s gross domestic product (GDP) reached an all-time high of 10.5% during the financial year 2016-17, up from 7.7% three year ago. The previous high was 10.1% during the Rajiv Gandhi government in 1987-88. Experts say this could be one of the reasons for a demand slowdown in the economy, as higher indirect taxes raise retail prices, ...

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First Published: Tue, September 26 2017. 23:02 IST