Quick Summary
The landmark GST overhaul is set to give a major boost to household consumption, credit expansion and overall economic growth, according to leading bankers. On Wednesday, the GST Council approved sweeping changes to the indirect tax regime, slashing rates on nearly 396 items from household essentials like hair oil and corn flakes to life and health insurance premiums. The move simplifies the structure into a two-tier system of 5% and 18%, while retaining 40% for sin goods such as tobacco and lu
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FAQ :
Bankers expect the GST rate cuts to significantly boost household consumption, credit expansion, and overall economic growth.
The GST Council has approved sweeping changes, simplifying the tax structure into a two-tier system of 5% and 18%, and slashing rates on nearly 396 items.
The new GST structure will come into effect on September 22, 2025.
Consumers are expected to benefit from lower costs on essentials, leading to higher disposable incomes and greater spending power.
Credit demand is anticipated to surge across retail, MSME, agriculture, and renewable energy segments.
Reduced GST rates on mass consumption goods are expected to help ease headline inflation.
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