Last week, a vendor sold an item for $10. With tax, that item costs $12. Let’s pretend a 50% markup (which is reasonable for retail but insanely high for groceries):

• they made $5 profit
• they recouped $5 for their costs
• they collected $2 of tax for the government

Now the government has a GST holiday and there’s no tax. I went to the store and bought the item and it still cost me $12.

• they made $7 profit
• they recouped their usual $5 for their costs
• they collected $0 of tax for the government

The main thing is that their costs for that item didn’t increase and they’re still selling it at its original ”final” price (because they added the tax amount to the sticker price). That tax savings went straight into profits. It was intended for the consumer to save money but the consumer is spending the same amount and the government isn’t getting anything. That money went somewhere.