By Shreyanka Nandan
As Navratri celebrations begin across the country, the government’s sweeping Goods and Services Tax (GST) reform, dubbed GST 2.0, came into effect from September 22. The move was announced by Finance Minister Nirmala Sitharaman after a meeting with the GST Council, consolidating the earlier four-tier system into just two slabs, 5% and 18% along with a steep 40% rate reserved for sin and luxury goods.
Prime Minister Narendra Modi hailed the rollout as a “festive bonanza” for India’s 1.4 billion citizens. The impact is immediately visible across markets. Prices of over 375 items have fallen, with companies in the Fast-Moving Consumer Goods (FMCG) sector issuing fresh price lists for soaps, shampoos, toothpaste, razors and baby products.
Food products have become lighter on the pocket, with ghee, butter, paneer, sweets, coffee, tea and ice-cream now taxed at lower rates. Traders in Indore, Bengaluru, Kolkata and other cities reported brisk sales whereas shoppers stocked up on discounted namkeen, dairy and packaged foods.
In a significant relief for households, medicines and health services have also been brought into the lower bracket, while insurance premiums are now tax-free. Electronic appliances, long considered expensive under the old tax regime, have also seen cuts. Televisions larger than 32 inches, air-conditioners, refrigerators and dishwashers, earlier taxed at 28%, now attract just 18% GST. Electronics majors such as Sony, LG and Panasonic responded swiftly, announcing price drops of up to ₹85,000 on certain TV models.
The automobile sector has emerged as one of the biggest beneficiaries. Maruti Suzuki, Tata Motors, Hyundai, Honda and JSW MG Motor India have all announced revised prices, with reductions ranging from ₹50,000 to over ₹1.2 lakh across small cars and SUVs. The combination of GST relief and festive discounts is expected to give a strong push to vehicle sales in the coming weeks.
However, not everything is getting cheaper. Cigarettes, chewing tobacco, pan masala, carbonated soft drinks and online gambling have been placed in the 40% category, along with luxury cars, premium bikes and imported gadgets. Even so, the overall reform is being seen as one of the most consumer-friendly steps since GST’s inception in 2017, with the government betting that the twin forces of lower prices and festive demand will help energise the economy this season.