Agree. https://www.dailypioneer.com/2025/columnists/gst-reforms--a-timely-boost.html GST Reforms: A Timely Boost Friday, 05 September 2025 | Pioneer "The GST rejig is a fiscal reset aimed at reviving demand and reaffirming the Government’s commitment to inclusive and sustainable growth The GST was brought with much fanfare but soon it turned out to be a problem in itself. Though a noble idea to have a uniform tax structure across the country, it failed on execution and led to multiple problems for filing the GST returns. Besides, there were anomalies and rate structures left much to be desired. Finally, the Government has taken some concrete steps to set its house in order. The Goods and Services Tax (GST) Council’s recent decisions mark a new chapter in India’s tax reform journey. The timing of this reform is crucial. With the festive season around the corner, household spending typically spikes, driving growth in the fast-moving consumer goods (FMCG) sector and beyond. In recent years, sluggish demand, inflationary pressures, and uncertainty in global trade had cast a shadow over India’s consumption story. Over the past few quarters, signs of a demand slowdown were evident. Rising input costs, combined with tariff pressures from global trade disruptions such as US tariff hikes, had weighed on India’s export-oriented and labour-intensive sectors. Domestically, discretionary consumption was uneven, with rural and semi-urban demand particularly subdued. Against this backdrop, lowering GST on staples like soaps, shampoos, and packaged snacks addresses two critical objectives: Reducing household expenditure and giving companies a reason to stimulate volumes. The reforms are expected to translate into price cuts or increased grammage in consumer goods, making daily essentials more affordable for millions of households. Larger pack sizes in particular are expected to see significant reductions, while smaller packs could pass on benefits through better value offerings. The pharmaceutical sector stands to gain significantly as well. GST on 33 lifesaving drugs has been reduced from 12 per cent to zero, and three critical cancer and rare disease therapies have also been exempted. For other medicines, the tax has been cut from 12 per cent to 5 per cent. The GST reforms will likely have a multiplier effect across the economy. Lower prices are set to lift consumer sentiment, particularly in rural and semi-urban India, where spending power is more sensitive to price changes. With Navratri and Diwali around the corner, the timing ensures that the benefits flow directly into festive spending, giving businesses — from ‘kirana’ stores to large retail chains — an immediate boost. On a macro level, the reforms reflect the spirit of “GST 2.0”— simplifying tax structures, reducing disputes over classification, and aligning taxation with the objective of inclusive growth. The GST Council’s decisions underscore the evolving nature of India’s tax framework — responsive, pragmatic, and attuned to economic realities. Though this Government largesse is going to cost the exchequer a whopping `1.4 lakh crores annually, it is a move in the right direction as it will ease the economy and the life of a common man!"
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