GST 2.0 poised to spur growth across sectors in Goa’s economy

New Delhi, Oct 12 The GST reforms are poised to impact Goa’s diverse economy across tourism, pharmaceuticals, fisheries, construction and agriculture, with the tax rate cuts leading to an increase in demand as goods have turned cheaper and input costs have fallen, resulting in enhanced competitiveness across sectors.

The lower GST rates are expected to boost Goa’s strong tourism & hospitality industry, covering north Goa’s beach belt areas such as Calangute, Candolim, Baga, and Anjuna, along with Panaji and the south Goa regions of Colva, Benaulim, and Palolem. As of March 2025, the sector employed around 2.5 lakh people, representing nearly 40 per cent of Goa’s total workforce. Tourism contributes 16.43 per cent to the state’s GSDP, making it a strong driver of the local economy.

With the GST rate cuts, input costs are expected to reduce significantly. Typical amenities such as toiletries, tableware, and breakfast staples will turn cheaper with the tax reduced from 18 per cent to 5 per cent, leading to an increase in demand.

Restaurants and beverage kiosks in Goa, including beach shacks, cafes, and juice stalls, are set to benefit from the GST reduction from 12 per cent to 5 per cent on fruit juices. Employing around 8,000 people, the sector comprises shack vendors, fruit juice sellers, and small kiosk operators who depend heavily on daily tourist footfall.

The auto, taxi, and bike-rental ecosystem in Goa is expected to benefit from the reduction in GST on small cars (≤1200cc) and bikes (≤350cc) from 28 per cent to 18 per cent. The change directly impacts taxi unions and rental firms operating across airports, railway stations, and coastal belts. The sector supports around 40,000 livelihoods, including taxi drivers, bike renters, and mechanics, largely self-employed and dependent on tourist demand.

Goa’s pharmaceutical formulations and diagnostics sector is concentrated in the Verna, Pilerne, Kundaim, Corlim, Bicholim, and Ponda industrial estates, supported by logistics through the Mormugao port. It employs skilled chemists, lab technicians, shop-floor workers, and QC staff, with both migrant and local workforces depending on steady jobs in formulation and IVD units. The sector caters to the Indian diagnostics market as well as export buyers across Asia and Africa. In 2023-24, drugs and pharmaceuticals made up 51 per cent of Goa’s total merchandise exports.

With the reduced GST rates, many inputs and services have been reduced from 18 per cent to 5 per cent, while certain medical items have moved to nil. These cuts are expected to enhance affordability and competitiveness across Goa’s pharmaceutical ecosystem.

The construction and real estate sector in Goa has gained from the recent GST reforms, which reduced the tax rate on cement from 28 per cent to 18 per cent, along with cuts on several other materials. The reforms benefit real-estate and hotel projects across North and South Goa, as well as infrastructure and homestay developments.

The fisheries and seafood value chain in Goa, central to Khariwada (Vasco), Cutbona (Betul), Talpona, Malim, Chapora, and Cortalim, now benefits from a reduced GST rate of 5 per cent on nets, feed, and aquaculture inputs. Contributing around 2.5 per cent to Goa’s GSDP, the industry sustains boat crews, small-scale fishers, migrant deckhands, auctioneers, and women vendors, with many coastal families relying on seasonal fishing for income.

Items earlier taxed at 12 per cent and 18 per cent now attract only 5 per cent, leading to an estimated reduction of about 6.25 per cent and 11 per cent, respectively, in consumer prices. This directly supports frozen fish and shrimp exporters in Margao and Vasco, and helps bring export competitiveness in local and global markets, including the US, EU, and Japan.

The lower GST rate is also expected to enhance the competitiveness of MSME bakeries, encourage higher sales, and improve profit margins, especially for small enterprises catering to tourist gifting and exports.

The Goa Cashew industry, spread across Sattari, Bicholim, Quepem, and Sanguem processing clusters, benefits from the GST reduction on kernels and value-added products, with rates on some nuts and confectionery lowered to 5 per cent. The sector employs around 18,500 people, including farmers, cashew pickers, nut shellers (predominantly women) and processors, with many families dependent on seasonal wage cycles. The industry serves both domestic retail and export markets, including the UAE, the USA, and the EU.

The GST reform reduces costs, making Goan cashew products more competitive. Value-added items using inputs taxed at 18 per cent, now moved to 5 per cent, such as chocolates and coffee-based preparations, are expected to see a retail price drop.

Goa’s GI-tagged farm products, such as Khola Chilli, Harmal (Pernem) Chilli and the Myndoli (Moira) Banana, will also benefit from the rate cuts. The sector includes small farmers, spice grinders, and cottage-industry processors.

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