GST taxation will become more transparent and easier to follow
FinTech BizNews Service
Mumbai, September 6, 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.
Mr. Ajay Kumar Srivastava, MD & CEO, Indian Overseas Bank, explains:
"The GST Council's decision to simplify the tax structure from the current four slabs — 5, 12, 18 and 28 per cent — to a two-rate structure — 5 and 18 per cent will make taxation more transparent and easier to follow. We expect these measures will drive an estimated growth in consumption over 8-10% in the next two quarters in rural markets, particularly benefiting farmers through reduced costs on agricultural products where GST has been brought down from the 12% to 5%. The price cuts on daily essentials like dairy products, household items, and consumer durables will provide more relief and reduce the burden to the consumers. The reduced GST on vehicles, electronics, and housing materials will create demand on this segments, while making insurance policies completely tax-free will enhance financial inclusion. As a banking institution, we expect increased credit demand across retail, MSME, and agricultural segments as incomes rise and business investment picks up. This reform will create a strong effect across the economy, leading to improved cashflows for distributors and retailers, greater working capital access for small businesses, and expanded credit requirements amid rising demand. Overall, this decision acts as a catalyst for inclusive growth and economic transformation aligning itself to India’s vision of Viksit Bharat”.
