GST rates News Highlights: 'GST reforms starting Sept 22 will give a big leg up to economy and GDP growth', says Piyush Goyal

"The GST rate rationalisation marks a pivotal moment in India’s consumption-led growth journey. By reducing levies on essential goods, the government has somewhere  eased consumer burden while catalysing fresh demand across sectors. With affordability rising and compliance simplified, it is expected to trigger a demand surge that reinforces India’s position as the world’s fastest-growing major economy.

With regards to tyres reduction of GST from 28% to 18%, and on farm tyres to 5%, is a landmark reform that will give a tremendous boost to the tyre industry and the mobility ecosystem. Tyres are an essential part of everyday life, and this progressive step will benefit both consumers and manufacturers alike. For fleet operators and farmers, lower GST translates into reduced input costs and improved operating efficiency, thereby strengthening demand in these vital segments. Combined with our continued focus on innovation and premiumization, this reform empowers us at JK Tyre to serve customers more effectively and contribute to sustained industry growth." Raghupati Singhania, Chairman & Managing Director, JK Tyre & Industries

The GST Council’s new framework, with reduced rates on essentials and revised auto levies, is set to boost household savings and make cars cheaper. Read more

In a key interview to CNN-News18, Union Commerce and Industry Minister Piyush Goyal on Thursday said that Prime Minister Narendra Modi trusts industry and revenue will go up. Goyal said that the fundamentals of the economy is strong making sure we only power on and not slip. Read more

Piyush Goyal on GST reforms: "I see this as the most transformative step the nation has seen in the past 56 year: For PM, ease of doing business is the pathway to a developed economy. India's economy soon to become 3rd largest by 2027. GST reforms is a labour of love which happened after many months of hard work."

“The GST Council’s decision to rationalize tax slabs is a timely and progressive step for India’s consumption-driven economy. By easing tax rates on freight services, with multimodal transport within India now at 5% (down from 12%) and road haulage rentals also reduced to 5%, the move will directly lower logistics costs and simplify compliance. We anticipate stronger household demand across FMCG, durables, and automobiles, and naturally, this momentum will drive higher shipment volumes across our networks, particularly as we approach the festive season.

At Blue Dart, we welcome this reform as it allows us to streamline logistics planning, reduce operating costs for customers, and strengthen the ecosystem for growth. Furthermore, we see this as an opportunity to enhance our role as the logistics partner of choice, delivering greater value while continuing to innovate for the future of India’s logistics industry.” Balfour Manuel, Managing Director at Blue Dart

"The GST Council’s latest rationalisation is not just India’s biggest tax overhaul since 2017—it is a reform with far-reaching impact on housing and construction. By reducing slabs to a simpler two-tier structure and eliminating ambiguity on rates, the Council has created a transparent, efficient system that will help both consumers and businesses.

For the housing and construction sector, the benefits are both direct and significant. With key input materials such as paints, tiles, electricals, fittings, and other consumer durables moving from the 28% slab to 18%, the overall cost of construction is set to ease. This reform comes at an opportune time, as urban centres like Mumbai are already witnessing robust demand, powered by infrastructure upgrades, rising employment opportunities, and a shift towards aspirational housing.” Samyak Jain, Director, Siddha Group

“The GST Council’s decision to reduce tax on the healthcare sector marks a transformative step toward greater affordability and inclusivity. At a time when India’s healthcare market is poised for significant growth, this reform acts as a timely catalyst to strengthen the ecosystem by addressing one of the biggest barriers to quality healthcare affordability.

Whether it is making life-saving drugs more accessible or lowering the cost of health insurance, the move directly tackles a long-standing challenge and will enable millions of families to take a crucial step toward financial and medical security.

For the health insurance sector, this change comes at a pivotal moment. As India’s healthcare needs expand and medical risks evolve, the importance of universal health coverage has never been more evident. Health insurance is not merely a financial product, it is a lifeline that protects families, supports well-being, and builds resilience against future uncertainties." Naveen Chandra Jha, MD & CEO, SBI General Insurance

"The recalibration of the GST structure will translate into lower administrative costs, fewer regulatory touchpoints and a larger room for growth and innovation for India Inc. India’s previous GST framework, characterised by multiple slabs, frequent rate changes, inverted duty structures and overlapping cesses, created challenges for businesses. Companies faced complex classifications, blocked input tax credits, frequent regulatory requirements and recurring disputes with tax authorities. The new dual-rate structure of 5% and 18% with a 40% rate on sin and luxury goods aims to resolve these issues by simplifying classifications, correcting duty inversions, and reducing litigation risks. Enhanced access to input tax credit and a greater need for adoption of e-invoicing, digital reconciliations, and automated filings will move the needle towards a cashless, paperless, and presenceless economy." Rishi Agrawal Ceo and Co founder of Teamlease Regtech

The GST Council’s move to exempt individual health insurance premiums while continuing to levy 18 percent tax on group policies may alter the dynamics of corporate health coverage, employee benefits, and insurer strategies, experts have said. Read more

"The reduction by the GST Council in rates on critical agricultural inputs is a progressive change that will directly impact India's marginal and small farmers. By cutting the GST on agri-drones, gibberellic acid, and a wide variety of bio-pesticides, such as Trichoderma, Pseudomonas fluorescens, and neem-based products, the government has reduced the input costs for the adoption of technology and sustainable and eco-friendly crop protection strategies significantly. This will encourage farmers to shift toward safer biological options, contributing to the improvement of soil health as well as long-term agricultural performance."

"Equally significant is the reduction of GST from 18% to 5% on fertiliser raw materials. Correcting this inverted duty structure will enhance the viability and affordability of fertiliser production, thereby ensuring the timely supply of essential nutrients to farmers at a reduced cost."

"There exists an opportunity for further rationalisation, particularly in sectors such as crop protection chemicals based on advanced chemistries, which work as an insurance for farmers against insect pests & diseases and a few raw materials that continue to be taxed at elevated slabs. The reforms represent a significant advancement toward a future in which affordable inputs, innovation, and sustainability operate for the benefit of every Indian farmer." RG Agarwal, Chairman Emeritus, Dhanuka Agritech Limited

"At the first impression, the GST rate changes look favourable especially since there is across the board decline in daily use items including services like hotel rates below INR 7500. Moreover, very critical items like cement have seen a cut from 28% to 18% which should be huge positive for the infra sector. The efforts to further ease the compliance burden on tax filers is positive and should aid ease of doing business. Today’s GST rate changes, along with RBI’s rate cuts, income tax rebates announced in FY26 budget and easing inflation are all levers for a consumption uptick in the economy. We expect GST related demand boost to add 100 to 120 bps to the GDP growth over next 4-6 quarters, thereby nullifying the negative impact of higher tariffs on exports to US. We remain constructive on the uptick in consumption demand in the economy as multiple policy levers turn favourable for the first time in a decade." Garima Kapoor, Economist and Executive Vice President at Elara Capital

"The reduction in GST on dairy products is a welcome step that will provide meaningful relief to consumers while encouraging higher consumption across categories like paneer, ghee, cheese, and ice cream. By bringing key products such as UHT milk and paneer into the zero-tax bracket, and lowering rates on ghee and cheese to 5%, the government has made nutrition more affordable and strengthened organized trade’s role in these fast-growing categories."

"For the industry, this opens up headroom to expand capacity, invest in better manufacturing practices, and streamline supply chains across both traditional and modern retail. As the world’s largest milk producer, with over 90 million smallholder farming families supporting 1.43 billion Indians, India stands to gain enormously and more milk will be absorbed into formal value chains, translating into assured procurement, better price realization for farmers, and a stronger, more resilient dairy sector. This move also aligns with the government’s broader focus on Make in India and building a globally competitive, sustainable dairy ecosystem." Ranjith Mukundan , CEO and Co-Founder, Stellapps

“The GST reforms rolled out by the Council are a landmark step in empowering the common man. By slashing tax rates on daily essentials, health insurance, medicines, and key services, the government is helping millions of Indian families save more money each month. Greater savings not only ease household budgets but also unlock new opportunities for individuals to invest in their future, be it education, entrepreneurship, or digital financial products. This shift from consumption tax burden to wealth creation is truly transformative for a growing economy like ours.

This move signals stronger consumer confidence, robust domestic demand, and a fertile environment for innovation. As Indians get more freedom to spend and invest, it paves the way for high-growth sectors, especially in fintech, healthtech, digital commerce, and emerging startups—to flourish.” Jeet Chandan, Managing Director, BizDateUp

"We appreciate the GST Council’s progressive step in rationalizing tax rates for hotel accommodation up to Rs 7,500. This is a timely and welcome reform that will make quality stays more accessible to a wider base of Indian travellers and at the same time strengthen the country’s positioning as a high-potential tourism hub. By reducing the tax burden on mid-scale and upper mid-scale hotels, the government has unlocked new opportunities for stronger domestic travel, weekend leisure breaks, and business mobility - factors that are critical to the hospitality sector’s growth. This move reflects a deep understanding of industry dynamics and traveller aspirations, and we are confident it will accelerate momentum across the hospitality landscape while reinforcing India’s ambition of becoming one of the world’s leading travel destinations." Nikhil Sharma, Managing Director & COO, South Asia, Radisson Hotel Group

“We believe that, despite an expected pickup in consumption in India, manufacturers are likely to assess the sustainability of demand before committing to significant capex. As such, a GST rate cut alone is unlikely to trigger a private capex recovery in the near term. Moreover, we see rising risks to government capex growth for FY27 and onwards, as policy focus shifts towards reviving consumption at the cost of foregone tax revenues. In our view, government capex growth in the coming year is unlikely to exceed single digits and could potentially turn negative to offset tax losses.” Aniket Jain, Lead Analyst & SVP (Capital Goods), Yes Securities, on the impact of GST rationalization

The Council of the Goods and Services Taxes (GST) on September 3 decided to increase the tax on coal and lignite from 5% to 18%, while also removing the additional compensation cess that is levied at 40%. The Union government, in a statement, said this move is unlikely to add more burden on the buyer and hence, unlikely to impact power prices. Read more

“The 40% GST on premium cars without any additional cess is good news for the premium car industry and will drive new sales. The uniform rate of 18% for auto parts will also have a good impact on supply chain and demand for high-quality original parts. This will give a positive push towards lowering the cost of ownership for our valued customers. The retention of 5% GST on all passenger BEV cars reconfirms government’s continued focus on sustainable mobility and transition to electric mobility as a top agenda. Long-term and stable taxation on electric cars will allow auto companies to continue with strategic expansion of product lines and move ahead with long-term plans to ‘Make in India’. This is necessary to realise the government’s ambition of EV penetration by 2030.For premium motorcycles below 350cc, the reduction of GST to 18% is set to spur demand. However, the increase in GST to 40% for motorcycles above 350cc will have a negative impact on the mid-segment and high-end segment models which has been seeing good growth for the past few years. Overall, the customers will benefit largely from these revised GST rates. Once these are implemented, we expect that the limbo in buying decisions will break and new sales will be back on track before festive season ends.” Hardeep Singh Brar, President and CEO, BMW Group India.

"We thank and congratulate the Government for the landmark second generation GST reform, a significant step towards accelerating India’s journey to a stronger and more resilient economy. Beyond empowering the common man, this reform is poised to enhance market confidence, strengthen consumer sentiment and stimulate investments — collectively broadening prosperity across the nation. The relief extended to smaller vehicles, along with the rationalization of levies on larger ones, will enhance mobility for the common man by making it more accessible and affordable, while at the same time stimulating growth across the automotive sector. As a next step , it is essential to reduce fossil fuel imports and achieve our stated national objectives of energy self-reliance, promotion of bio-fuels and decarbonisation. Given India’s rapid economic growth that is bound to increase the demand for energy, particularly fossil fuel consumption by transportation sector, it is crucial that all cleaner and greener technologies are also promoted and incentivised through suitable policy measures, including taxation so that these are preferred by consumers over the conventional petrol and diesel vehicles.” Swapnesh R Maru, Deputy Managing Director, Toyota Kirloskar Motor

Packaged goods, consumer electronics and personal care products are the big winners of the goods and services tax regime overhaul announced on September 3, with industry experts estimating a 5–12 percent reduction in tax incidence, across categories such as biscuits, noodles, ACs and television sets. While consumers are set to get some relief in everyday essentials and durables, analysts expect companies to balance value delivery and pricing strategies, making affordability the defining theme of the GST transition. Read more

Packaged goods, consumer electronics and personal care products are the big winners of the goods and services tax regime overhaul announced on September 3, with industry experts estimating a 5–12 percent reduction in tax incidence, across categories such as biscuits, noodles, ACs and television sets. While consumers are set to get some relief in everyday essentials and durables, analysts expect companies to balance value delivery and pricing strategies, making affordability the defining theme of the GST transition. Read more

“These reforms reflect Prime Minister Narendra Modi’s vision for next-generation GST that prioritizes both ease of living and ease of doing business. The streamlined GST framework goes beyond rate rationalization with structural reforms enhancing long-term confidence in India’s economic environment. The GST Council’s decision to retain the 5% GST rate on electric vehicles is a forward-looking move that reinforces India’s commitment to sustainable, zero-emission mobility and signals long term policy stability. The reduction of GST on small cars to 18% further expands access to personal mobility, making it more affordable for a broader section of society. Together, these measures will not only accelerate EV adoption but also drive innovation, strengthen domestic manufacturing, and propel India toward a cleaner, smarter, and self-reliant mobility future.” Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Ltd. and Tata Passenger Electric Mobility Ltd.

"The 56th GST Council meeting marks a watershed moment for India’s automobile retail industry. FADA warmly welcomes the bold and progressive reforms which simplify the tax structure, lower rates for mass mobility, and bring consensus across all States. This is a decisive step that will boost affordability, spur demand, and make India’s mobility ecosystem stronger and more inclusive. We thank the Hon’ble Prime Minister, Finance Minister, and the GST Council for taking such a courageous decision with unanimity. As the country heads into the peak festive season, glitch-free implementation will be the key to ensuring that the benefits seamlessly reach customers. One area that may needs earliest clarification is about levy and treatment of cess balances currently lying in dealers’ books, so that there is no ambiguity during transition." CS Vigneshwar, FADA President

Benchmark indices fell sharply from day's high on September 4 after they rose nearly 1% during early trading. Amid broad-based buying, the 30-share BSE Sensex jumped 888.96 points to 81,456.67 in opening trade. The 50-share NSE Nifty surged 265.7 points to 24,980.75. Know the key reasons behind market decline: Read here

"The government’s move to rationalise GST into a simpler slab structure is a landmark reform that holds wide-ranging benefits for consumers, businesses, and the Indian economy. The reform sets up a positive cycle for people at large, as it directly increases disposable income, giving households more flexibility to spend, save, and plan ahead. The timing could not be more significant; with the festive season approaching, this reform will strengthen consumer sentiment. For the credit card industry too, this creates a strong growth opportunity." Salila Pande, MD & CEO, SBI Card

“Automobile Industry welcomes the Government’s decision to reduce the GST on vehicles to 18% and 40%, from earlier rates of 28% to 31% and 43% to 50%, respectively, especially in this festive season. This timely move is set to bring renewed cheer to consumers and inject fresh momentum into the Indian Automotive sector. Making vehicles more affordable, particularly in the entry-level segment; these announcements will significantly benefit first-time buyers and middle-income families, enabling broader access to personal mobility. We also thank the Government of India for continuing with GST rate of 5% on Electric Vehicles, which will help sustain the ongoing momentum towards sustainable mobility. Furthermore, the resolution of classification interpretations and the correction of the inverted duty structure will greatly streamline business processes across the automotive industry, supporting ease of doing business. We are confident that the Government will also soon notify suitable mechanisms for the utilisation of compensation cess on unsold vehicles, ensuring a smooth and effective transition.” Shailesh Chandra, President, SIAM

"The GST Council’s decision to exempt health insurance premiums while allowing insurers to utilise input tax credits is a landmark step that combines consumer benefit with industry growth. This reform will make health protection more affordable for millions of families, senior citizens, and small businesses who often find premiums to be a stretch. By lowering the cost of entry, it encourages more individuals to seek coverage earlier, thereby strengthening the risk pool and improving the long-term resilience of the insurance sector. Insurance is not just a financial product but a safeguard for households against rising healthcare costs and unforeseen emergencies, and this measure will help embed it more deeply into financial planning. We view this as a forward-looking reform that creates a win-win scenario for both consumers and insurers, and one that will contribute meaningfully to the journey of building a healthier and more financially secure India." Rakesh Jain, CEO at Reliance General Insurance

“Government listened to the automotive industry’s long-standing wish list of rationalizing GST rates. This GST revision is the step in right direction, is progressive and will induce the much-needed impetus by boosting consumption and bring momentum to the automotive industry which essentially remains the pulse of the Indian economy. We are thankful to the Government for keeping the GST rate for BEVs unchanged, ensuring faster transition to a decarbonized future.” Santosh Iyer, MD &CEO, Mercedes-Benz India

"We welcome the recent GST reforms as a decisive step towards creating a more level playing field and fostering growth within the consumer electronics and appliances industry. The rationalization of GST rates to a uniform 18% on products such as TVs, monitors, air conditioners, and dishwashers is a particularly positive move. It not only enhances affordability for Indian households but also simplifies compliance and operational efficiency for manufacturers and brands." Ravi Agarwal, Co-Founder and Managing Director, Cellecor

"The new GST rate cut from 28% to 18% is a progressive reform as it will make electronic items like televisions, air-conditioners, and other appliances significantly more affordable for millions of Indian households. The 18% GST bracket enables consumers to save around Rs 3000 to Rs 5000 on major appliances and encourages them to fulfil their needs this festive season. This bold step will boost customer demand in tier II and III cities, essentially. The new GST rate cuts will also empower the entire electronics industry and fuel its momentum. Additionally, the industry will be able to enjoy faster transit times across state borders, enhanced overall operational efficiency, and reduced logistics costs." Anurag Sharma, Managing Director & CEO, AKAI India

The GST 2.0 reforms announced by govt., effective from 22nd September 2025 are designed to lower tax rates across a wide basket of goods and services, setting the stage for a consumption-driven push to the economy. The most visible relief could be to FMCG and consumer durable sector, where most goods moved from higher bracket to 5%/18% or nil, aiding players such as Nestle, HUL, Dabur, Colgate-Palmolive, Marico, Heritage Foods, Dodla Diary etc. In consumer durables, companies like Voltas, Blue Star, Havells, and Dixon including others should see expansion. Similarly, autos and tyres gain from GST reduction on affordable segment cars, two-wheelers, and tractor components, lifting stocks like Maruti Suzuki, Tata Motors, M&M, Hero MotoCorp, TVS, Apollo Tyres, Ceat, MRF, etc. The cement sector also enjoys relief with GST cut to 18%, benefiting players like UltraTech, ACC, and Ambuja with indirect benefit to realty sector, to some extent. The textile industry benefits from the GST rate cut on apparel and footwear priced below Rs.2,500, which now attract just 5% tax. This move will benefit players in the affordable and mass-market segment like Trent, V-Mart, Campus and other value-focused retailers. Many other reductions in textiles sector are expected to ease input costs across the textile value chain. For insurance sector, the exemption of GST on health and life insurance products marks a revolutionary structural shift for the industry, though the actual benefit that will eventually pass on to policyholders remains uncertain as insurers may lose some input credit advantages. Overall, the reforms by the government are meant to boost Indian consumption, with tax reliefs expected to have a wide-ranging effect on the economy and lift demand across multiple sectors. - Puneet Singhania, Director at Master Trust Group

“This GST reform is a game-changer for women and youth, lowering compliance costs and making housing, medicines, and inputs more affordable. It paves the way for innovation, entrepreneurship, and stronger families. The government’s message is clear: every rupee saved on taxes creates opportunity and strengthens India’s future.” - Ridhima Kansal – Director, Rosemoore

“The sharp drop in GST on medicines—from as high as 12-18% to 5% or zero on life-saving drugs—brings us closer to affordable healthcare. FM Sitharaman’s reforms break down barriers, making essential therapies, cancer drugs, and health devices available to the public. This is a victory for patients and families fighting treatment costs, fostering better health outcomes and wider coverage.” - Jeevan Kasara – Director and CEO, Steris Healthcare

“The GST rate cuts, especially on essentials like cement, provide real relief for MSMEs. Construction, manufacturing, and retail sectors can now expand, invest, and hire without heavy tax burdens. This signals the government’s recognition of MSMEs as partners in growth. Lower GST is fuel for business expansion and job creation.” -- Lokendra Singh Ranawat – Co-founder & CEO, WoodenStreet

"The cuts on GST for cement and medicines mean unprecedented opportunities for young entrepreneurs and women-led ventures. Affordable real estate and reduced medicine costs ease household burdens. With less bureaucracy, creativity and resilience thrive, making the rise of new startups and businesses a testament to ambition, not privilege." - Gunjan Goel – Director, Goel Ganga Developments

“With a simplified GST regime, the sector will enjoy more transparency and renewed trust among stakeholders. The lower tax on cement reduces construction costs, raises supply, and revives demand, offering fresh hope to builders and buyers alike.” - Manoj Goyal, Director, Forteasia Realty

The GST Council’s approval of a two-tier rate structure of 5% and 18% is aimed at improving India’s indirect tax system. The move aims to lower compliance costs, reduce disputes, and help businesses by making it more predictable. This will in turn, help boost investor confidence, as it signals policy stability and a stronger commitment to reforms.

For foreign institutional investors (FIIs), the simplification of GST will be seen an encouraging. It strengthens the ease of doing business, ensures better earnings visibility for companies, and supports long-term consumption growth by potentially reducing the tax burden on goods and services. These factors will improve India’s attractiveness as an investment destination.

However, while reforms like GST are positive, it is not the only thing that FII’s will consider. FII flows are also influenced heavily by other global factors such as US interest rates, USD strength, and risk appetite, so the reforms alone, whilst positive, are just one factor to consider.

Overall, this reform adds to India’s credibility as a high-growth economy that is open to reform. FIIs are likely to take note, but their return will depend on both India’s continued reform momentum and broader global financial conditions. - Ross Maxwell, Global Strategy Lead at VT Markets

The government’s new GST changes in effect from September 22, promise some relief for students / parents. Everyday stationery like notebooks, pencils, maps, charts, crayons, globes etc will now be tax-free. Textbooks and other study materials have also moved into the 0% or 5% bracket. For families already stretched with school budget this will be a relief. On the other hand coaching classes, online learning apps and skill training centres will still be taxed at 18%. Students preparing for exams like NEET or JEE, or taking online courses there is no relief. Colleges and schools continue to pay heavy GST on infrastructure costs that eventually are passed down to students. The cut on supplies is welcome, the real step forward would be reducing GST on allied education services too. Coaching is an added expense and probably not recommended  in an ideal world, but then schools would need to take on the entire onus of education outcomes. Moreover If we are looking at encouraging academic bank of credits with MOOCS / online learning tax cuts for these in the future would be welcome. So while books will be cheaper, knowledge commands a price, no cuts there! - Charu Malhotra, Co-Founder & MD, Primus Partners

"We welcome the GST Council’s progressive decision, which brings greater clarity and efficiency to the power sector. As an integrated energy company with a strong presence in both transitional and renewable energy generation, we believe this step will not only ease operations across the value chain but also strengthen India’s transition towards sustainable energy. While the tax rate on coal has been raised from 5% to 18%, the overall impact will be minor as the existing compensation cess of Rs 400 per tonne has now been subsumed within the GST rate. However, to support the transition from fossil fuels to non-fossil sources, the reduction of GST on renewable sector products from 12% to 5% is truly transformative. It will further enhance renewable energy capacity and accelerate the adoption of green technologies such as biogas, solar cells, green hydrogen and battery energy storage systems. This reform reaffirms the government’s commitment to building a robust and future-ready power ecosystem, and we remain dedicated to contributing to the nation’s energy security and green growth journey." - . Ratul Puri, Chairman, Hindustan Power

The GST revisions reflect a forward-looking approach to strengthening India’s agri-food ecosystem. The reduction from 12% to 5% on agricultural machinery, drip irrigation systems, sprinklers, specified bio-pesticides and micro nutrients will ease farm-level costs, promote mechanization, and accelerate adoption of sustainable practices such as water-use efficiency and eco-friendly crop protection. Equally important is the lowering of GST on food processing products and fruit juices, which enhances value addition, creates stronger farmer–market linkages, and expands consumer access. A particularly strategic reform is the reduction of GST on key fertilizer inputs—sulphuric acid, nitric acid, and ammonia—from 18% to 5%. This move not only reduces fertilizer manufacturing costs and farmer input prices but also improves the competitiveness of domestic producers and supports soil nutrition security. Collectively, these measures highlight the government’s use of taxation as a lever to reduce input costs, stimulate investment, and drive sustainable, inclusive growth in agriculture.” - M Ramakrishnan, Managing Director, Primus Partners

“The reduction of GST on cement from 28% to 18% is a welcome step that will have a far-reaching impact on the housing sector for all segments. With lower construction costs, developers can deliver homes more quickly and at more competitive prices, especially in the affordable and mid-range housing segments. This decisive reform will stimulate demand, strengthen supply, and move the vision of ‘Housing for All’ closer to realisation. It will also help cushion the impact of recent Trump tariffs on high-end housing, which have driven up costs. We warmly welcome this rationalisation, as it brings much-needed relief to the industry and renewed confidence to both developers and homebuyers.” - Aarti Harbhajanka, Co-Founder & Managing Director, Primus Partners

The GST rate cut on cement is a game-changer for the real estate sector. With input costs forming nearly half of total project expenses, this move directly improves housing affordability and unlocks fresh demand. It’s a timely reform that empowers developers to pass on savings to homebuyers, while accelerating India’s broader vision of infrastructure-led growth. The GST slab revision on renewable energy equipment is a strategic catalyst for sustainable infrastructure and green building adoption. It is an enabler for developers to fast-track holistic, wellbeing-focused living spaces. This creates a stronger, more transparent value chain benefiting both developers and buyers. We welcome this timely reform and remain committed to building high-quality homes and communities that resonate with India’s evolving aspirations and deliver greater value to every family. - Payas Agarwal, Director, Great Value Realty

The GST Council’s landmark decision to collapse the four-tier system into a simplified 0%, 5%, 18% and 40% framework is a strong push towards ease of compliance and consumer relief. With essential goods like milk, paneer, insurance, and life-saving drugs moving to the zero-tax bracket, households will feel an immediate reduction in costs. States, which had been wary of revenue losses, have supported the move as the broader base and higher 40% slab for luxury and sin goods promise to balance collections. For industry, the rationalisation reduces ambiguity and working capital blockages, while for consumers, it translates into cheaper essentials and clarity at billing counters. This consensus-driven step marks one of the most significant overhauls since GST’s inception. - Gaurav Garg, Lemonn Markets Desk

Goyal: The icing on India's growth story was provided yesterday with the GST reforms as promised in the Independence Day address by PM Modi.

Goyal: GST reforms coming on the back of several initiatives of the last 11 years is transformational in nature significantly helping every stakeholder from farmers to MSMEs, and every consumer stands to benefit. GST reforms will play a key role in India becoming Viksit Bharat by 2047

Goyal: Unless we pass on all these benefits of GST to the consumers, and I will urge you all to resolve that the entire benefit of yesterday's significant concessions on GST will be passed on to consumers. We will all ensure that we will all buy India-made products. Swadeshi goods, we will promote and encourage, generating more domestic demand and investments so that India continues to grow as the fastest in the world.

“The rationalisation of GST rates is a measure that carries wide implications across multiple sectors of the economy. For hospitality, the reduction of tax on hotel rooms priced up to ₹7,500 per night—from 12% with input tax credit to 5% without ITC—will help make mid-market offerings more affordable and stimulate domestic travel, thereby strengthening the ecosystem of tourism and allied services.

In real estate, healthcare, and educational infrastructure, the lowering of GST on construction materials and other inputs provides welcome cost relief. This will ease the burden of development and operating expenses in areas that directly influence quality of life and community well-being.

While the absence of input tax credit in hospitality requires hotels to absorb upstream tax without set-offs, the path forward lies in a combination of thoughtful pricing, operational efficiency, and cross-sector synergies. On balance, these reforms align affordability with fiscal discipline, offering the potential for both demand stimulation and sustainable growth.” – Harshavardhan Neotia, Chairman, Ambuja Neotia group

Under the revised GST regime, motorcycles and scooters with engine capacities up to 350cc will now be taxed at 18%, down from the earlier 28% (28% GST + 0% cess).

This move will bring down prices of several best-selling models, including the Hero HF Deluxe, Hero Splendor Plus, Honda Activa 110, Honda Shine 125, TVS Jupiter, TVS Raider, Bajaj Pulsar 125, Bajaj Pulsar RS200, as well as the Royal Enfield Bullet 350 and Classic 350.

“India’s tax story was once a circus… every state its own ringmaster, every tax a new ticket. GST brought order, but the new regime adds muscle. Essentials stay at 5%, value-adds at 18%, and indulgence is slapped with the 40% FAT — the Fancy Attack Tax. Not on staples, but on luxuries and sin goods. The message is clear: protect the middle class, fuel demand, discipline supply, and make extravagance pay. The Great Indian FAT GST isn’t reform in slow motion, it’s reform with a backbone, taxation that roars, not whispers.” - Ayush Nambiar Political Strategist

The government’s bold step to simplify GST into two slabs will not only ease compliance but also boost consumer confidence and demand. By putting more spending power in the hands of people, this reform is set to energize the economy. For electronic goods in particular, air-conditioners and large-screen TVs moving from 28 % to 18 %, these durables become significantly more affordable. This not only boosts consumer purchasing power but is poised to reinvigorate demand in the electronics sector and accelerate India’s make in India momentum.” — Ashok Chandak, IESA and SEMI India

The Confederation of Real Estate Developers’ Associations of India (CREDAI) extends its sincere thanks to the Hon’ble Finance Minister for the significant step towards simplifying the GST rate structure—reducing it from four tiers to two. This rationalization is a commendable reform that will bring substantial relief to all sections of society and is expected to further ease inflationary pressures.

The reduction in GST on cement from 28% to 18% is a landmark move that will have a transformative impact on the real estate and construction sectors. CREDAI believes this reduction will help bring down the overall cost of raw materials, ultimately benefiting homebuyers and boosting housing affordability.

The process reforms announced alongside these rate changes mark a positive step towards a more transparent and efficient tax regime, likely to result in improved GST compliance and increased revenue collections.This is a game-changing initiative that is expected to stimulate demand across sectors and provide a much-needed boost to manufacturers, suppliers, and developers alike.

CREDAI remains committed to working closely with the Government to further rationalize GST on housing and make quality homes more accessible and affordable for all. -- Shekhar Patel, President CREDAI

The government’s move to simplify GST by reducing slabs from four to three is a smart step. Essential and aspirational goods now largely fall under the 5% and 18% brackets, which makes the system simpler and fairer. Unlike income tax cuts that benefit specific sections, GST rationalisation reaches everyone — especially rural households and the middle class. This comes at the right time, as consumption has been muted for several quarters due to inflation and weak demand. By putting more disposable income in people’s hands, GST 2.0 can reignite consumption and set off a multiplier effect across the economy. Some of the key sectors that stand to benefit from this are insurance, FMCG, automobiles, agriculture equipment, cement, consumer durables, apparel, footwear, QSR, and retail. - Pranav Haridasan, MD and CEO, Axis Securities

“The GST cut on cement and other construction materials is a landmark step that directly lowers the cost of construction. This reduction enables developers to maintain price stability and pass on the benefit to homebuyers through improved affordability. It will also support healthier project economics and encourage further investment into housing and urban infrastructure.” - Kamal Khetan, Chairman & Managing Director, Sunteck Realty

The definition of small cars under the new GST regime goes far beyond entry-level models like the Maruti Suzuki Alto K10, Maruti Suzuki S-Presso, or Renault Kwid. The tax relief will also extend to several of India’s top-selling vehicles, including the Maruti Suzuki WagonR, Swift, Baleno, Dzire, and Fronx; Hyundai Venue, Exter, i20, and Grand i10 Nios; Tata Punch, Tiago, and Tigor; Mahindra XUV 3XO; Kia Sonet; Toyota Glanza and Urban Cruiser Taisor; as well as the Nissan Magnite and Renault Kiger.

Under the new GST policy, most small and mid-sized cars have been moved to the 18 percent slab, while luxury cars will fall under the 40 percent rate. Despite the higher bracket, luxury vehicles will still face a lower overall tax burden compared to the current regime.

Currently, small petrol cars with engines up to 1,200 cc and under 4 metres in length attract 28 percent GST plus 1 percent cess. Small diesel cars with engines up to 1,500 cc and the same length criteria draw 28 percent GST and 3 percent cess, resulting in a total incidence of 31 percent.

At present, all cars except electric vehicles are taxed at 28 percent GST, with cess rates varying by segment. For SUVs with engines above 1,500 cc and longer than 4 metres, the effective tax incidence climbs to nearly 50 percent — comprising 28 percent GST and 22 percent cess.

The GST rate revision, effective September 22, is expected to simplify the taxation system for cars and make pricing more transparent across categories.

Following Wednesday’s overhaul of the Goods and Services Tax (GST), effective September 22, several popular cars will become cheaper as the tax rate is cut to 18 percent from the current 28 percent.

Small cars — long considered the backbone of India’s passenger vehicle market — have faced a slowdown and shrinking demand in recent years. The new GST regime is now expected to trigger a revival in the segment.

Tobacco stocks surged in trade this morning, even as FM Sitharaman announced that cigarettes, paan masala, gutka, and other tobacco products will be taxed at 40 percent under the GST 2.0.

According to brokerages, the move is likely to be neutral to positive for tobacco companies.

At present, tobacco products attract 28 percent GST plus a cess, comprising both specific and ad valorem duties.

The combined tax incidence works out to around 50–55 percent of the MRP.

Analysts said the new structure may simplify the levy without significantly increasing the overall tax burden, which explains the upbeat sentiment in tobacco counters.

This led to tobacco stocks rallying in Thursday’s session.

The GST Council has slashed rates on a wide range of consumer goods — from air conditioners and refrigerators to small cars — with the revised rates taking effect from September 22. The move is expected to give festive shoppers added relief ahead of Diwali.

However, industry experts say buyers can stretch their savings further by choosing the right payment option. Credit cards offering instant discounts, cashback schemes, and reward points can help shoppers stack benefits on top of GST rate cuts, turning purchases into a double gain.

With shopping lists set to grow longer this festive season, financial planners advise comparing card offers before making big-ticket buys. From gifts to household appliances, every transaction can add value through reward points and exclusive deals.

In short, while GST rate cuts reduce upfront costs, leveraging credit card benefits can ensure consumers make every rupee spent work harder.

The GST Council’s sweeping rate rationalisation is set to benefit large parts of the food and personal care space, while sin goods like cigarettes face a steeper levy, according to JM Financial Institutional Securities.

Mehul Desai of JM Financial noted that the most notable changes came through drastic reductions in key staples. In the food and beverages segment, branded namkeens, bhujia, instant noodles, fruit juices, and Ayurvedic products saw their GST rate cut from 12% to 5%. Packaged water, chocolates, biscuits, and instant coffee moved from 18% to 5%.

Personal care categories such as hair oils, shampoos, oral care products, and soaps also saw a sharp reduction from 18% to 5%. However, the home care segment — including detergents, household insecticides, and dishwashing products — remained unchanged at 18%, which Desai flagged as a negative surprise.

On the other hand, sin goods were moved into the new 40% slab from the earlier 28% plus cess structure. For aerated beverages, this transition without cess is seen as neutral and broadly in line with expectations. For cigarettes, however, Desai pointed out that the MRP-to-tax ratio for ITC could drop to 40% from the current 47–48% (excluding NCCD). He cautioned that a hike in excise duty in the Union Budget or future GST meetings could offset this shift to keep overall tax incidence neutral.

Among listed companies, the biggest beneficiaries are expected to be Britannia, Colgate, Nestle, Dabur, Bikaji, and DOMS, given their high exposure to the categories with tax cuts. The extent of benefit to demand and profitability, Desai added, will depend on how much of the tax reduction companies pass on to consumers.

“Prima facie, stocks in all the large beneficiary segments should react positively to this development,” he said.

The cars of luxury brands like Mercedes-Benz, BMW, Jaguar Land Rover (JLR) and Audi are expected to become slightly affordable in India following the Goods and Services Tax (GST) Council's move to rationalise the levy and remove the compensation cess. As part of the GST rationalisation, only two slabs -- 5% and 18% -- remain now. The GST Council has abolished the 12% and 28% slabs. Besides, a new 40% slab has been introduced for luxury and sin goods. (Read More)

The Indian rupee opened 1 paise lower on Thursday after the government cut the Goods and Services Tax on small cars, televisions, air conditioners, textiles, and a range of household goods effective September 22. The local currency opened at 88.0813 against the US dollar, compared with 88.0700 against the greenback at the previous close. (Read More)

Consumption-oriented stocks, ranging from consumer staples, discretionary and durables, are set to see sharp gains in trade on Thursday, September 4, after the Finance Minister Nirmala Sitharaman, heading the Goods and Services Tax (GST) Council, announced steep cuts in GST rates across several categories. The Goods and Services Tax structure has been rationalised into two major slabs: five percent and 18 percent, with a sin tax rate of 40 percent. The 12 percent and 28 percent slabs have been removed. (Read More)

In a major tax reform, the GST Council on Wednesday agreed to cut GST slabs to two: 5% and 18%. The existing 12% and 28% will be eliminated, effectively reducing the prices of several items. In a late evening media briefing, finance minister Nirmala Sitharaman said that this is not just GST rate rationalization but a "structural reform" which will ease compliance. She added that rates of most common use items have come down. Check full list of GST rate cuts here

“On behalf of Indian industry, I extend our deepest appreciation and congratulations to the Hon’ble Prime Minister and Hon’ble Finance Minister for steering the GST Council towards one of the most significant reforms since the introduction of GST in 2017. Today’s decisions demonstrate statesmanship, vision, and a clear commitment to inclusive economic growth. The rationalisation of slabs into a dual-rate structure of 5% and 18% is a masterstroke of simplification. It will make compliance easier, reduce cascading, and strengthen the competitiveness of Indian industry. Simplification of taxes is not just a procedural improvement, but a fundamental enabler of investment and growth. The targeted rate reductions on mass-consumption items will spur demand at a time when boosting household purchasing power is critical. Equally important is the focus on MSMEs through faster registration and quicker refunds, which will unleash entrepreneurial energies across the country. Indian industry believes that these reforms, coming ahead of the festive season, will provide a powerful impetus to consumption, manufacturing, and job creation. This is a reform that will be remembered for its clarity, inclusiveness, and balance. CII looks forward to working closely with the Government and all stakeholders to ensure successful implementation of these changes and to take forward India’s growth and competitiveness agenda.” - Rajiv Memani, President, CII on GST council meeting

The goods and services tax rates applicable on popcorn had become a major point of discussion last year when the GST Council had introduced different levies for multiple varieties of popcorns. However, that debate is likely to come to an end with the new rate structure approved on September 3 by the Council, which comes into effect on September 22. Under the new GST regime, popcorn mixed with salt and spice will attract 5 percent GST regardless of whether it is sold loose or pre-packed and labelled. The rate will be higher at 18 percent if it’s caramel popcorn, as this will fall under sugar confectionery. (Read More)

The goods and services tax (GST) Council in its 56th meeting held in New Delhi on September 3 reduced the tax on renewable energy devices and parts used for manufacturing from the existing 12 percent to 5 percent. The Council, however, increased the tax on coal and lignite from 5 percent to 18 percent. Moneycontrol had reported that the Council could reduce the tax on renewables while increasing it for coal as a means to compensate for the revenue loss to be incurred by the state governments. (Read More)

All individual life insurance products — including term plans, ULIPs, and endowment policies — along with their reinsurance, will now be exempt from GST. The move is intended to make insurance more affordable and expand coverage across the country.

Imported armoured luxury sedans will be exempt from GST only under specific circumstances, such as those imported by the President’s Secretariat.

All goods containing added sugar, sweeteners, or flavouring — including aerated waters — will now be taxed at 40%, up from 28%. The newly created 40% slab will also apply to sin and luxury items such as cigarettes, premium liquor, and high-end automobiles, ensuring no tax relief for these categories.

The valuation method for pan masala and tobacco products will now move from transaction value to Retail Sale Price (RSP). This change is aimed at improving compliance and preventing revenue leakage.

Pan masala, gutkha, cigarettes, chewing tobacco, zarda, unmanufactured tobacco, and bidis will continue to attract existing high GST rates along with the compensation cess. These levies will remain in place until all cess-linked loans are fully repaid.

•Fertilisers: Down from 12%/18% to 5%.

•Agricultural inputs: Seeds and crop nutrients rationalised to 5%.

•Healthcare: Life-saving drugs, medical devices, and health-related products cut to 5% or exempted.

•Consumer goods: Entry-level electrical appliances shifted from 28% to 18%.

•Textiles & footwear: Reduced from 12% to 5%, lowering costs for mass-market products.

•Milk products: UHT milk is now tax-free; condensed milk, butter, ghee, paneer, and cheese have dropped to 5% or nil.

•Staple foods: Malt, starches, pasta, cornflakes, biscuits, chocolates, and cocoa products have been cut to 5%.

•Dry fruits & nuts: Almonds, pistachios, hazelnuts, cashews, and dates reduced from 12% to 5%.

•Sugar & confectionery: Refined sugar, syrups, toffees, and candy now taxed at 5%.

•Other packaged foods: Vegetable oils, edible spreads, meat, fish products, and malt-extract-based packaged foods moved to 5%.

•Namkeens & snacks: Bhujia, mixtures, and similar ready-to-eat items shifted from 18% to 5%.

•Water: Mineral and aerated water (without added sugar or flavours) reduced from 18% to 5%.

Finance Minister Nirmala Sitharaman highlighted that several consumer durables frequently purchased by middle-class families have been brought under the 18% category. These include televisions, air-conditioners, and motorbikes under 350cc, offering much-needed relief to household budgets.

A wide range of goods — from groceries and fertilisers to footwear, textiles, and renewable energy — will now fall under lower tax brackets. Items earlier taxed at 12% and 28% will largely migrate to the 5% and 18% slabs, making household essentials and everyday products more affordable.

The GST Council has announced a major overhaul effective September 22. Only two rates will remain in place — 5% and 18%. A special rate of 40% will continue to apply to demerit goods such as pan masala, cigarettes, and sugary or carbonated beverages. This simplification aims to make the tax system leaner and easier to follow.