Good question — we can answer it with a simple, transparent formula and a few numeric examples.

1) The basic formula

Let

• $C$ = pre-GST-2.0 taxable consumption (currency units)

• $r_0$ = current effective GST rate (as a decimal, e.g. 12% = 0.12)

• $g$ = consumption growth caused by GST-2.0 (here $g=0.10$ for +10%)

• $r_1$ = new effective GST rate under GST-2.0 (decimal)

Original revenue = $R_0 = C imes r_0$
New revenue = $R_1 = C(1+g) imes r_1$

So $R_1 > R_0$ ⇔ $C(1+g)r_1 > C r_0$ ⇔

Equivalently the condition for revenue to increase is:

With $g=0.10$:

2) Numeric threshold example (digit-by-digit arithmetic)

If the current effective rate $r_0=12$ (0.12):
Compute threshold $r_0/1.1 = 0.12 div 1.1$.

Step-by-step:
0.12 ÷ 1.1 = 0.109090909... ≈ 10.9091%

So if $r_1>10.9091$ then revenue rises; if $r_1<10.9091$ revenue falls (despite +10% consumption).

Another example: if $r_0=10$ (0.10):
0.10 ÷ 1.1 = 0.09090909... ≈ 9.0909% → new rate must exceed ≈9.09%.

If $r_0=15$:
0.15 ÷ 1.1 = 0.1363636... ≈ 13.6364% → new rate must exceed ≈13.64%.

3) Examples of percent change in revenue

The revenue ratio = $dfrac{R_1}{R_0} = dfrac{1.1,r_1}{r_0}$.
Percent change = $ig(dfrac{1.1,r_1}{r_0}-1ig) imes100$.

Example: $r_0=12$, $r_1=15$:

1. 1.1 × 0.15 = 0.165

2. 0.165 ÷ 0.12 = 1.375

3. Percent change = (1.375 − 1)×100% = 37.5% increase in revenue.

Example: $r_0=12$, $r_1=10$:

1. 1.1 × 0.10 = 0.11

2. 0.11 ÷ 0.12 ≈ 0.9166667

3. Percent change ≈ (0.9166667 − 1)×100% = −8.3333% (a fall).

4) Important real-world caveats (qualitative)

The math above is mechanical and assumes the effective tax base and compliance stay constant except for the +10% consumption. In reality:

• Compliance/evasion: Raising nominal rates can increase tax evasion (reducing the effective base). That could offset revenue gains.

• Base composition: If GST-2.0 changes exemptions or brings more items into the tax base, revenue could rise even with a lower average rate.

• Behavioral responses: Higher prices may dampen real consumption (the +10% assumption could be optimistic or pessimistic depending on how policy is structured).

• One-off vs sustained: A short-term 10% consumption bump (e.g., stimulus) differs from a permanent structural change.

• Administrative costs and timing: Revenue collection lags, refunds, and transitional rules matter.

5) Bottom line (short answer)

With a 10% increase in consumption, revenue will be larger if and only if the new effective rate $r_1$ satisfies:

Plug in your actual current effective GST rate $r_0$ and the proposed new rate $r_1$ to check. If you like, tell me plausible values for $r_0$ and $r_1$ (or I can test several candidate scenarios) and I’ll compute exact revenue changes for each.

Yes — you’re correct. The data show that under Goods and Services Tax (India) (GST) there are published “old” rates and the new rates introduced under what is called “GST 2.0”. I’ll summarise the key numbers so you can use them in your calculation.

✅ Key published rates

Old structure (pre-GST 2.0)

• The GST slabs included: 5%, 12%, 18%, and 28%. ClearTax+3Enkash+3ClearTax+3

• Standard rate for many goods/services was often 18%. ClearTax+2Godrej Capital+2

• Higher luxury/“sin” goods taxed at 28% (plus sometimes additional cess). Wikipedia+2Enkash+2

New structure (GST 2.0, effective ~22 Sept 2025)

• The reforms consolidated many slabs into: 5% (merit/essential goods) and 18% (standard goods) for most items. ClearTax+2World Trade Scanner+2

• A special higher rate of 40% introduced for luxury/sin goods. Enkash+1

⚠ Important caveats

• These are slab rates, i.e., assigned categories of goods/services. “Rate” in your calculation would be an effective average rate across consumption, which is more complex.

• “Old rate” and “new rate” differ by category—some goods moved from one slab to another (e.g., from 28% → 18%), others from 12% → 5%, etc. So there isn’t a single old rate and a single new rate for all goods.

• For your calculation of revenue impact you’ll likely need an average effective GST rate across the consumption base, both before and after reform — not just one slab rate.

• Implementation date: the new structure comes into effect from 22 September 2025 for many items. www.ndtv.com+1

If you like, I can look up estimates of the “average effective GST rate” (across all taxable consumption) from pre-reform and the projected new regime for India. That would give you a more realistic value for $r_0$ and $r_1$ in your calculation. Would you like me to fetch those?

Great — we have enough data to run a rough calculation and estimate whether revenue would increase under Goods and Services Tax (India) (“GST”) 2.0 with a 10% boost in consumption. Here are the steps and assumptions, followed by the conclusion.

✅ Known facts & assumptions

From the sources:

• GST Collections for FY 2024-25: ~ ₹22.08 lakh crore (₹22.08 trillion) according to government data. The Times of India+2ETCFO.com+2

• GST 2.0 rate structure changes: The new slabs effective 22 Sept 2025 are: 5%, 18% for most goods/services, and a higher 40% slab for luxury/sin goods. India Briefing+3Jagranjosh.com+3The Financial Express+3

• For simplification: Old structure had slabs such as 12% and 28% etc. www.bajajfinserv.in+1

• Assumption: Consumption increases by 10% due to reform / induced demand.

We don’t have a published average “effective GST rate” (weighted across all goods/services). So we’ll need to assume one.

🔢 Simplified model & calculation

Let’s define:

• Base consumption (before GST 2.0) = $C_0$

• Effective average GST rate before reform = $r_0$

• After reform, consumption rises by 10% → new consumption = $C_1 = 1.10 imes C_0$

• Effective average GST rate after reform = $r_1$

• Revenue before = $R_0 = C_0 imes r_0$

• Revenue after = $R_1 = C_1 imes r_1 = 1.10 imes C_0 imes r_1$

Revenue increases if:

🎯 Example scenarios

We pick plausible values for $r_0$ and see what $r_1$ would need to be.

Scenario A: $r_0 = 15$ (0.15)

• Then the threshold: $r_1 > 0.15 / 1.10 = 0.13636… ≈ 13.64$

• If GST 2.0 effective rate ends up at 14% → revenue goes up (because 14% > 13.64%).

• If GST 2.0 effective rate falls to 12% → revenue goes down (12% < 13.64%).

Scenario B: $r_0 = 12$ (0.12)

• Threshold: $r_1 > 0.12 / 1.10 = 0.10909… ≈ 10.91$

• So if new effective rate ≥11% → revenue higher; if <11% → revenue lower.

Given the reform simplifies slabs (moving many goods to lower slabs) → the average effective rate might go down. If that happens, the consumption increase would need to offset the smaller rate.

📊 My estimate & conclusion

• Since GST 2.0 moves many goods into lower rates (for example from 12% → 5%, or 28% → 18%) as part of rationalisation. ClearTax+2The Financial Express+2

• That suggests $r_1$ may be less than $r_0$ in many cases (average effective rate falls).

• If the average effective rate drops more than the factor corresponding to the consumption growth (10%) then revenue could fall despite higher consumption.

• But if the consumption growth is strong and administrative/compliance improvements broaden the base, the net revenue could still increase.

Therefore: Under the assumption of 10% consumption growth, whether revenue increases or not depends on how much the average effective rate falls.

• If the average effective rate after reform stays above ~11-14% (depending on starting rate) → revenue rises.

• If it falls below that threshold → revenue could fall.

Given the reform aims include reducing rates for many goods (which pushes the effective rate downward) but also broadening base/boosting demand, the likely outcome is some increase, but the magnitude may be modest, and there’s a real risk of revenue drop if the rate cut is large and consumption growth <10% or compliance doesn’t improve.

If you like, I can run a more detailed model using estimated consumption base for India (for example ₹100 lakh crore) and different potential effective average rate numbers (say 14% → 11%, 15% → 12%, etc.) and show you a table of revenue outcomes. Would that be helpful?