For industry, the rationalisation reduces ambiguity and working capital blockages, while for consumers, it translates into cheaper essentials and clarity at billing counters
FinTech BizNews Service
Mumbai, September 4, 2025: The 56th meeting of the GST Council was held in New Delhi under the chairpersonship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. The GST Council inter-alia made the recommendations relating to changes in GST tax rates, provide relief to individuals, common man, aspirational middle class and measures for facilitation of trade in GST.
Gaurav Garg, Lemonn Markets Desk:
The GST Council’s landmark decision to collapse the four-tier system into a simplified 0%, 5%, 18% and 40% framework is a strong push towards ease of compliance and consumer relief. With essential goods like milk, paneer, insurance, and life-saving drugs moving to the zero-tax bracket, households will feel an immediate reduction in costs. States, which had been wary of revenue losses, have supported the move as the broader base and higher 40% slab for luxury and sin goods promise to balance collections. For industry, the rationalisation reduces ambiguity and working capital blockages, while for consumers, it translates into cheaper essentials and clarity at billing counters. This consensus-driven step marks one of the most significant overhauls since GST’s inception.
Aalesh Avlani, Co-founder, Credit Wise Capital: on the GST development on two-wheelers that came in last night by the government-
“The reduction of GST on two wheelers up to 350cc from 28% to 18% is a welcome move that will make two-wheelers more affordable and accessible for millions of customers. This decision is likely to boost demand in the entry-level and mid-segment categories, which form a large part of India’s two-wheeler market. Two wheelers is a lifeline for most of Bharat, and any move that facilitates this, will be a major boost to the economy. It will also provide much-needed momentum to the automobile sector and allied industries.
From a financing perspective, lower vehicle costs not only reduce the overall loan burden for customers but also improve their repayment capacity, thereby encouraging more people to opt for formal credit. I believe this reform will further accelerate the shift towards digital-first, hassle-free financing solutions, empowering more consumers to fulfil their aspiration of owning a two-wheeler.”
Sadaf Sayeed, CEO, Muthoot Microfin:
"With fiscal and monetary policies moving in tandem, the recent 50 bps rate cut by the RBI coupled with GST rationalisation by the government is set to provide a strong boost to India’s economic growth. As rate transmission takes effect, we can expect consumption to rise naturally, further supporting growth momentum."
