The GST Reset
The GST Council's meeting on September 4, 2025, marked a significant shift. A two-rate tax slab was approved, sparking reactions across industries. The key
highlight was the reduction of GST on various items, including medical devices and instant coffee. This move is anticipated to impact various sectors and the average citizen, with expectations that these changes will improve affordability and give a boost to consumption, as mentioned by Morgan Stanley. The new rates became effective from the first day of Navratri.
Market's Festive Cheer
The stock market celebrated the GST overhaul with significant gains. The Sensex experienced a substantial jump, signaling investor confidence in the reforms. Stocks in the FMCG, consumer durables, and cement sectors rallied. This positive market response reflects an anticipation of accelerated infrastructure growth, reduced costs, and increased consumer spending, creating a 'Big Diwali gift' as described by Harsh Goenka. The automobile sector stocks also experienced an upward trend.
Benefits for All
The GST changes were designed to bring relief to the common man, with the government and industry leaders emphasizing their commitment to passing on the benefits. Zero GST on health and life insurance, as declared by Apollo HealthCo, further reduced the burden. Experts anticipate these adjustments will help each and every family, simplifying compliance for businesses. Salons, gyms, and yoga services became more affordable and Bata started passing on the benefits.
Industry Reactions
Industry players welcomed the GST rate cuts and the focus on common-man, labor, and agriculture. The automobile sector also applauded the GST rate cut. While some expressed disappointment over the increase in GST for premium air travel, others, like the textile industry, hailed the revised rates. The focus now is on implementing these changes and ensuring the benefits reach the intended recipients.
Political Perspectives
Political figures weighed in on the GST reforms, with varied reactions. Some, like P. Chidambaram, welcomed the changes, while others, such as Pawan Khera of the Congress, were less enthusiastic. The BJD demanded full GST exemption on certain sectors. The ongoing discussions and debates reveal the complex nature of the GST overhaul and its potential impact on the political and economic landscape of India.
