Farmers,shopkeepers welcome GST reforms as rate cuts begin today

The country’s indirect tax structure underwent a major revamp on Monday with the rollout of the second generation of the Goods and Services Tax (GST 2.0), making essential and mass-market products cheaper while imposing higher levies on ultra-luxury and sin goods. From the first day of the Navratri festival, GST has moved to a simplified two-tier structure, with the majority of goods and services falling under either 5 per cent or 18 per cent slabs, or attracting no tax at all.The 12 per cent and 28 per cent GST tax slabs have been scrapped, while a new 40 per cent GST rate has been introduced for ultra-luxury products and sin goods such as pan masala, cigarettes, aerated water with added sugar, and carbonated beverages.
Farmers, Consumers, Shopkeepers Welcome New GST Rates
Prices of a wide range of items—from kitchen staples to electronics, from medicines and equipment to automobiles—are now lower following GST rate cuts on nearly 375 items.Prime Minister Narendra Modi, in an address to the nation on Sunday (September 21, 2025), welcomed the “next generation reforms” and congratulated citizens on what he described as the “GST Savings Festival.” He said the restructured GST rates would make daily essentials cheaper, positively impacting the poor, middle class, and the emerging new middle class.The Prime Minister also reiterated the importance of buying domestically produced goods, saying, “India’s prosperity will gain its strength from the Swadeshi mantra.”The Congress, however, criticised the Centre, accusing PM Modi of taking “sole ownership” of the GST amendments while failing to address states’ key demand for extending the compensation period by another five years.
Union Home Minister Amit Shah also praised the GST reforms, calling them a testament to PM Modi’s determination to serve the poor, youth, farmers, and women. He said the changes would accelerate India’s growth towards becoming one of the world’s most prosperous nations.

Union Home Minister Amit Shah tweets, "Modi government's gift of Next Gen GST reform to all the mothers and sisters of the country on the auspicious occasion of Navratri! Modi ji's promise to the countrymen regarding GST reform has been implemented across the entire country… pic.twitter.com/f6gtBsykkh

— ANI (@ANI) September 22, 2025

The automobile sector is among the largest beneficiaries of GST 2.0. Duties on small cars have been cut to 18 per cent from the earlier 28 per cent plus surcharge. Even luxury cars, though taxed at 40 per cent, have seen price reductions due to the scrapping of cess. Leading automakers including Maruti Suzuki, Tata Motors, Mahindra, and Hyundai have already announced significant cuts in vehicle prices.FMCG giants Hindustan Unilever, Procter & Gamble, and Emami have also slashed prices on everyday items such as soaps, shampoos, toothpaste, razors, baby diapers, and hair oil, with tax rates on these products cut to 5 per cent from 12–18 per cent earlier. Mass-consumption goods such as ghee, paneer, butter, namkeen, ketchup, jam, coffee, dry fruits, and ice cream will also get cheaper.While companies have started implementing the new prices from September 22, existing stocks with old MRPs can be sold until March 31, 2026. The Department of Consumer Affairs has instructed firms and retailers to update MRPs through stickers, stamps, or online printing to reflect the revised prices.The department has also launched a new GST grievance redressal facility on the National Consumer Helpline (NCH) to allow customers to report issues related to revised GST rates, billing, and exemptions.
A study by FICCI and the Thought Arbitrage Research Institute (TARI) highlighted that more than 75 per cent of items rural households spend on will now attract nil or 5 per cent GST. For urban households, the proportion is 66 per cent. The reforms are expected to give a major boost to consumption, especially during the upcoming festive season of Navratri and Diwali.Union Finance Minister Nirmala Sitharaman said the GST rate cuts would place around Rs 2 lakh crore directly into the hands of consumers, spurring demand and driving economic growth.The GST Council had approved the reforms in its September 3 meeting. Along with rate cuts, it also cleared structural reforms aimed at making business easier, particularly for MSMEs.According to FICCI-TARI, sectors critical to rural employment and manufacturing—such as tractors, farm machinery, fertilizers, textiles, handicrafts, auto components, and construction inputs—will now be subject to lower, more rational rates.Calling GST 2.0 among the most revolutionary tax reforms in independent India, Praveen Khandelwal, National Secretary General of the Confederation of All India Traders (CAIT), said the changes would empower small traders, boost consumer confidence, and propel India toward becoming a $10 trillion economy.Khandelwal added that CAIT has advised all trade associations nationwide to ensure the benefits of GST rate cuts are passed on to consumers in both “letter and spirit.”

(Business Correspondent)