New GST Reform Will Boost Consumer Sentiment, Industry Confidence: Deloitte

 The GST revamp that slashes tax rates on goods and services into a simplified two-slab structure addresses deeper structural changes, prioritising the "real drivers of the economy", says Deloitte India.

Mahesh Jaisingh, Partner & Indirect Tax Leader at Deloitte India, said the 56th GST Council meeting signals a strong reformist intent, going beyond mere rate rationalisation to address deeper structural changes and ease of doing business.

GST tax rates on common use items ranging from hair oil to corn flakes, TVs, and personal health and life insurance policies were slashed after the GST Council on Wednesday approved a complete overhaul of the tangled Goods and Services Tax regime.

The GST Council approved an overhaul of rates by limiting slabs to 5 per cent and 18 per cent effective from September 22, the first day of Navaratri.

Almost all personal use items will see rate cuts as the government looks to boost domestic spending and cushion the economic blow of the US tariffs.

By focusing on labour-intensive industries, farmers, agriculture, and health, the Council has clearly prioritised the real drivers of the economy.

Significant rate reductions on items of common use bring much-needed relief to households, while exemptions on food items help curb classification disputes, reflecting the spirit of GST 2.0.

"These measures will not only boost consumer sentiment but also enhance industry confidence. Taken together, the reforms mark a decisive step towards making GST a true growth engine for the Indian economy," Jaisingh said.

Key sectors like FMCG, auto, cement, and insurance stand to benefit from proposed rate cuts, potentially boosting demand and growth. 

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