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GST reforms to boost GDP by Rs 20 lakh crore: Ashwini Vaishnaw
Under the new structure, GST slabs have been simplified from four (5%, 12%, 18% and 28%) to just two: 5% and 18%, with a special 40% rate reserved for luxury and sin goods.
Vaishnaw said the reform is being welcomed across the country as it allows people to save a greater share of their income and makes most everyday essentials more affordable.
Union Electronics and IT Minister Ashwini Vaishnaw on September 22 said that the simplification of the Goods and Services Tax (GST) framework will significantly improve ease of doing business, boost demand, and add nearly ₹20 lakh crore to India’s GDP.
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Speaking to the media, Vaishnaw said the reform is being welcomed across the country as it allows people to save a greater share of their income and makes most everyday essentials more affordable.
According to DD News, he cited several examples of lower GST rates: cement – reduced from 30% to 18%; sanitary pads – reduced from 13% to zero; footwear – reduced from 18% to 5%; refrigerators – now taxed at 18%; and detergents – now tax-free.
Overall, taxes on nearly 370 items, including daily necessities and life-saving medicines, have been reduced. Many items previously taxed at 5%, 12%, or 18% are now fully exempt.
Union Finance Minister Nirmala Sitharaman said the reform would inject an additional ₹2 lakh crore into the economy by increasing disposable income and spurring consumption.
Under the new structure, GST slabs have been simplified from four — 5%, 12%, 18% and 28% — to just two: 5% and 18%, with a special 40% rate reserved for luxury and sin goods.
The GST Council’s sweeping tax reform, replacing four slabs with a simplified two-rate structure of 5% and 18%, triggered immediate price cuts across a wide basket of goods, from toiletries and packaged foods to high-ticket home appliances.
The timing, coinciding with the nine-day Navratra festivities, added momentum to consumer demand, according to companies and trade insiders.
PTI reported that air-conditioners, which moved from the 28% slab to 18%, were the biggest gainers. “Till 5 pm, our dealers reported almost double sales compared to any other Monday,” said N.S. Satish, President of Haier India, adding that pre-bookings had begun even before the new rates took effect. Blue Star MD B. Thiagarajan said enquiries were strong and projected growth of around 20% versus last September.
Television sales also spiked, particularly in popular 43-inch and 55-inch segments. Avneet Singh Marwah, CEO of Super Plastronics Pvt Ltd, said sales grew 30–35% on the first day, largely through Flipkart. “The sentiment is very upbeat, and e-commerce discounts are further accelerating the trend,” he noted.
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