The latest GST reforms introduce multi-sectoral changes:
Food Processing: Staple foods are made GST-free, while most processed food items have been rationalized to a 5% rate. Simplified rate slabs, now just 5%, 18%, and 40% for sin goods, streamline compliance, correct inverted duty structures, and resolve classification disparities.
Fitness & Youth Mobility: GST on gym and fitness services has been reduced from 18% to 5%, and on bicycles and parts from 12% to 5%, encouraging affordable fitness and green transport options.
Automobiles & Components: Major cuts across auto segments, including two-wheelers (≤350cc), small cars, buses, tractors (<1,800cc), and auto parts are expected to boost vehicle demand, reinvigorate MSMEs, generate informal sector jobs, and support cleaner mobility.
These regime-wide reforms are designed to lower consumer prices, improve ease of living, promote domestic value-addition, and expand employment across value chains.
Relevant question for policy stakeholders:
How can GST rationalisation be designed to balance revenue stability for the exchequer with affordability and demand stimulus for consumers?
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