GST Rate Cut 2025: How the Stock Market Reacted and What Lies Ahead
September 04, 2025
Indian economy
/ News
From Shampoo to Cement: How GST Rate Cuts Are Shaping India’s Market Rally The Indian stock market stepped into September 2025 on a strong note after the government rolled out major changes in the Goods and Services Tax (GST) system. Effective from September 22, the first day of Navratri , the reforms have reduced tax rates across a wide range of consumer and industrial goods. As soon as the announcement came, both Sensex and Nifty jumped sharply to new highs , with investors cheering what is being seen as one of the most significant tax reforms since GST was first introduced. What Exactly Changed in GST 2.0? The GST Council scrapped the earlier 4-tier structure (5%, 12%, 18%, 28%) and replaced it with a simplified two-slab system: 5% and 18% . Alongside this, a special “sin tax” of 40% was introduced for luxury cars, tobacco and similar items. Here are some big changes: Daily-use items like soaps, shampoos, toothpaste, and hair oil – now taxed at just 5% instead of 12–18%. ...