The new reforms in Goods and Services Tax (GST) have kicked in today, making kitchen essentials, electronics and other usual daily supplies cheaper than earlier, giving much needed relief to the consumers.
The changes, the biggest overhaul since GST was introduced in 2017, will see the current 5 per cent, 12 per cent, 18 per cent and 28 per cent structure replaced with just two rates including 5 per cent and 18 per cent.
Under the new reforms, daily food and essentials, life and health insurance policies, automobiles and transport, electronics, appliances, stationery, beauty services, lifestyle services, and machinery have become cheaper.
The ultra-luxury items will be taxed at 40 per cent, while tobacco and related products will stay in the 28 per cent plus cess bracket.
Finance Minister Nirmala Sitharaman had earlier said that the new GST structure has reduced the tax burden on people.
Speaking to Tehelka Monarch Goyal, CEO of Electrowaves Electronics said that the reforms will help to rationalise tax systems and reduce procedural burden, thereby empowering businesses – especially Small and Medium Enterprises (SMEs) – to operate, grow and contribute to a progressive and sustainable economy.
“Recent GST reforms constitute another step towards ease of compliance and ease of doing business. The reforms will help to rationalise tax systems and reduce procedural burden, thereby empowering businesses – especially small and medium enterprises (SMEs) – to operate, grow and contribute to a progressive and sustainable economy. The reforms are intended to lessen the compliance burden while increasing transparency and accountability in the system,” Goyal stated.
Prof. Anirban Ghatak, Economist, Assistant Professor at Indian Institute of Management, Kozhikode said that while GST on coal has moved from 5% to 18%, the removal of the ₹400/tonne cess means coal-based electricity is not costlier, and may even become slightly cheaper if the benefits are passed on to the consumer.
“This keeps EV running costs stable, possibly improving their relative attractiveness against ICE vehicles. On the household side, cheaper white goods could expand energy use, nudging behaviour towards higher consumption unless efficiency norms counterbalance it. Evolutionary dynamics here matter. Repeated consumer choices will either reinforce carbon-intensive paths or create pressure for greener supply. On compliance, unchanged thresholds mean much of the informal sector remains outside the net, but simpler slabs and reduced evasion gaps can gradually shift norms towards disclosure, especially if coupled with incentives for digital payments. In the short run, the reform is more about coordination, but it creates a possibility of long-term equilibrium changes,” Ghatak said.
Preeti Bajaj, MD & CEO, Luminous Power Technologies said that with our reliable, affordable, and sustainable energy solutions, we remain committed to powering India’s progress and lighting up lives.
Meanwhile, the GST reforms have also given breathing space for gym goers as the sector will attract 5 per cent GST under the new regime.
Avinash Deshmukh, Chief Operating Officer, iThrive Essentials told Tehelka, “GST council has taken a very welcome step in reducing GST from 18 per cent to 5 per cent on nutraceuticals and vitamins. This will definitely spur demand and more people will be able to afford these healthy essential products.
“We look forward to a similar reduction in lifesaving nutrition consulting services which is still taxed at 18 per cent,” he added.
Amid the excitement and joy in the market due to news rates of GST, Shashi Bhushan, Chairman of the Board at Stellar Innovations voiced concern and said that as GST reforms evolve, it becomes essential for the government to ensure that businesses fairly transmit savings and benefits to customers.
“Merely announcing rate cuts will not suffice; there should be clear accountability and digital tracking of pricing patterns at different stages in the supply chain. Integrating AI-driven analytics across invoices and retail pricing can help flag anomalies. Building a grievance redressal system specifically for GST-related irregularities is equally vital to protect consumer interests. It is only when tax rationalization truly reflects in reduced costs of goods and services that the spirit of GST is realized. By holding companies accountable and enabling consumer transparency, policymakers can ensure equitable distribution of benefits and a stronger economic lifecycle,” he added.
Echoing the same, Zafeer Ahmed, Managing Director of XRE Consultants said that the real challenge is making sure consumers actually see the benefits. The government really needs to keep a close eye on things to confirm businesses are passing on tax cuts in their prices.
“Setting up clear ways to report, doing surprise checks, and having tough penalties for not following the rules could stop businesses from making unfair profits. We also need awareness campaigns to help customers speak up when something doesn’t look right. Passing on GST savings isn’t just about following rules. It builds trust and can really boost spending. When businesses do the right thing and the government watches carefully, we’ll likely see better feelings from consumers and steady growth in the formal economy,” he added.
