Nirmala Hails GST 2.0 Benefits

Union finance minister Nirmala Sitharaman (Image Channel 24:)

Union finance minister Nirmala Sitharaman on Saturday hailed next-gen indirect tax reforms, saying that tax benefits due to the recent GST rate cuts have been fully passed onto the common man in the country

New Delhi: Union finance minister Nirmala Sitharaman on Saturday October 18, 2025 hailed next-gen indirect tax reforms, saying that tax benefits due to the recent GST rate cuts have been fully passed onto the common man in the country. She further said that the government is closely monitoring the rate reduction of 54 daily-use items and it will also continue to add more items in the future as well.

Amid tariff threats by the US, the main focus of the Prime Minister Narendra Modi-led NDA government is to increase the consumption demand through ongoing festive sales and boost the country’s economy post GST 2.O reforms.

“The next-gen reform will inject Rs 2-lakh crores into the economy by increasing consumers’ disposable income,” Ms Sitharaman said while addressing the media at the “GST Bachat Utsav 2025” conference in the national capital.

Sitharaman, along with her two colleagues—Union minister for commerce and industry Piyush Goyal and IT minister Ashwini Vaishnaw—highlighted the impact of next-gen GST reforms in a joint briefing and assured the future course of actions related to GST rate cuts and benefits that need to be passed to the consumers.

“For every item I have monitored, which affects the day-to-day life of citizens, the weighted average of the reduction is being passed on, and in some cases, even more. The impact of these new GST rate cuts is remarkable,” Ms Sitharaman said, sharing the percentage of benefits passed on across different items.

The government’s briefing came as India’s festive demand shows strong momentum across key consumer sectors, including automobiles, electronics and fast-moving consumer goods, driven by the implementation of GST 2.0 that came into effect on September 22. With the GST cuts leaving more money in the hands of the common man, Ms Sitharaman highlighted its impact in many sectors, including the auto industry, saying that strong vehicle sales were seen across all segments.

“Three-wheeler dispatches rose 5.5 per cent year-on-year, while two-wheeler sales reached 21.6-lakh units. Passenger vehicle dispatches alone stood at 3.72 lakhs in September,” the finance minister said.

When asked about the consumers’ complaints on GST rate cuts, Ms Sitharaman said that the department of consumer affairs has received 3,169 complaints related to non-reduction in prices commensurate with the GST cut. “Of this, 3,075 complaints have been forwarded to nodal officers in the Central Board of Indirect Taxes and Customs (CBIC). A total of 94 complaints have been resolved by the department. The department will enable a functionality on the grievance reporting portal so that the complaints can be forwarded to the chief commissioners of the respective zones from where complaints have come in,” the finance minister said.

Vaishnaw and Goyal also emphasised the impact of tax cuts on the common man and the overall economic growth of the country.

Vaishnaw, on his part, said that an extra Rs 20-lakh crores of consumption boost to the economy will come partly through the recent GST cuts. “Because of the next-gen GST reforms, consumption will be significantly increasing and it’s very likely that consumption will increase more than 10 per cent this year, which means there is a strong possibility of extra consumption of around `20-lakh crores,” he said.

During the GST reform, many estimates were made about how consumption will increase and how demand will grow in the country. If we look at our GDP numbers from last year, it was Rs 335-lakh crores. Of that, our consumption accounted for `202-lakh crores and investment accounted for `98-lakh crores. Besides, the government is expecting a boost in electronic consumption triggered by the GST reforms. Data from all retail chains shows there were 20-25 per cent more sales in comparison to last Navaratri…”

Vaishnaw added. Goyal also said that the recent GST reforms have brought about a positive trend in terms of consumption.

“Almost all e-commerce companies passed GST cuts and also gave Navratri offers over and above that, as per what we have monitored,” said Goyal, adding that e-commerce firms sell products of other manufacturers.

When asked about the US tariff issue and the status of the India-US deal, Goyal said that discussions between India and the United States on the proposed bilateral trade agreement are progressing in a “cordial atmosphere”, stressing that New Delhi will safeguard the interests of farmers, fishermen and the MSME sector.