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Reformed GST Slabs Trigger Surge In Market And Consumer Confidence
Reformed GST Slabs Trigger Surge In Market And Consumer Confidence
Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based tax levied on the supply of goods and services. It was introduced in India to simplify the tax structure by replacing multiple indirect taxes with a single, unified tax.
New Delhi: A renewed sense of enthusiasm and momentum has been felt across markets, industry, business circles, and among the general public, following recent reform in tax slabs of the Goods and Services (GST), said Union Commerce and Industry Minister Piyush Goyal on Saturday. Goyal said this in a joint press conference with Finance Minister Nirmala Sitharaman and IT Minister Ashwini Vaishnaw.
Speaking on the ease the reformed GST system has given to the consumers, Union Ministers hailed the recent GST rate rationalisation as a major driver of economic momentum during this year's festive season. The Union Ministers highlighted that the GST rate rationalisation reforms, which came into effect on September 22, have led to increased consumer demand, price reductions, and a visible boost in key sectors such as automobiles, electronics, and FMCG, among others.
Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based tax levied on the supply of goods and services. It was introduced in India to simplify the tax structure by replacing multiple indirect taxes with a single, unified tax.
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GST reforms came into effect in India on September 22, following the 56th GST Council meeting. The most significant change was the move from a multi-tiered slab system (0%, 5%, 12%, 18%, and 28%) to a simplified structure of 5% and 12% only, with a new 40% rate for luxury and "sin" goods.
In a joint press conference today in the national capital, Union Finance Minister Sitharaman highlighted the tangible impact. "It was launched on the first day of Navratri, I feel the people of India have received it well," the Finance Minister said, adding that the government has closely monitored 54 essential items and found that in every one of them, the tax benefit has been passed to consumers.
The recent GST rate cut has led to a surge in orders for auto component manufacturers, driven by increased vehicle sales and consumer purchasing power. She added that the last nine days of September alone saw a surge in purchases, with passenger vehicle dispatches touching 3.72 lakh units, two-wheeler sales reaching 21.60 lakh units, and three-wheeler dispatches growing 5.5 per cent YoY.
Emphasising the impact of rate rationalisation, Sitharaman stated that sales of television sets surged 30-35 per cent while the sales of Air Conditioners (ACs) doubled on the first day. On day 1, LG India noted exponential growth in sales and during Navratri season sales of FMCG sector too have gone up, she further added.
The period from Navratri to Diwali traditionally sees heightened home-buying sentiment across the country. Industry experts suggest that the combination of reduced GST rates and festive enthusiasm is set to accelerate housing demand. With lower input costs potential buyers are expecting lower prices and showing greater confidence in making purchase decisions during this period.
Union Commerce and Industry Minister, Piyush Goyal said the reforms were long in the making. "Finance Minister's announcement of the GST reform on September 3 had been in the works for nearly a year and a quarter under the guidance of the Prime Minister. I thank the Prime Minister and the Finance Minister for making this year's Navratri so special. On September 22, the new form of #NextGenGST was implemented. In the markets, among industry and business circles, and among the general public, everyone experienced a renewed sense of enthusiasm and energy," he added.
He emphasised that the dual push of infrastructure investment and affordability is yielding a multiplier effect. "This is why India remains one of the fastest-growing economies globally. The IMF has revised our GDP growth forecast to 6.6 per cent." He credited Prime Minister Modi's leadership for driving ease of living and inclusive growth. "From the poor to the youth, every section of society is moving forward with the resolve to build a #ViksitBharat by 2047."
Union Information and Technology and Railways Minister, Ashwini Vaishnaw shared the sales data of electronic items and added that electronics sales surged 20-25 per cent this Navratri compared to last year. "From TVs to washing machines and smartphones, every major category saw increased demand, resulting in record sales and a boost to electronics manufacturing." The sector now directly employs 25 lakh people.
Vaishnaw also noted a 2 per cent reduction in food inflation, with prices experiencing deflation for four consecutive months. "This new economic atmosphere has reached every household. The spirit of swadeshi is stronger than ever." The ministers concluded that the GST reforms have successfully driven down prices while fuelling demand, marking 2025 as a turning point for India's consumer economy.
Speaking at the impact, M Paramasivam, Executive Director of Punjab National Bank said, "The period from Navratri to Diwali traditionally sees heightened home-buying sentiment across the country. Industry experts suggest that the combination of reduced GST rates and festive enthusiasm is set to accelerate housing demand. With lower input costs potential buyers are expecting lower prices and showing greater confidence in making purchase decisions during this period."
Source: ZeeNews
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