Archive · 8 Sep 2025
GST Rate Changes to Impact India's Economy and Travel Costs
India has changed its tax rules called GST.
Some things, like economy flights, are now cheaper.
Premium flights got a bit more expensive.
Companies might make more money because of these changes.
The government hopes these changes will encourage people to spend more money.
Changes affect cars, especially smaller two-wheelers.
Certain sectors, like construction materials, will also be affected.
Overall, the goal is to help the economy grow and make things more affordable.
Indian companies are expected to see a 6-7% rise in revenue in FY2025-26 due to GST rate cuts.
Premium air travel has increased to 18% GST, while economy class remains at 5%.
GST on two-wheelers under 350cc is reduced to 18%.
Automakers' sales are expected to increase by 1-2%.
Reductions in GST are anticipated to lower prices in construction materials.
- Who
- The Indian government and companies.
- What
- Revised GST rates on various sectors like aviation, automobiles, and consumer durables.
- When
- The GST Council meeting last week; rates effective from September 22, 2025.
- Where
- India.
- Why
- To boost spending, make travel cheaper, and positively impact various sectors.
- Revenue Growth (India Inc.)
- 6-7% in FY2025-26
- GST on Premium Air Travel (Now)
- 18%
- GST on Economy Air Travel
- 5%
- GST on Two-wheelers (<350cc)
- 18%
- Impact on Automakers' Sales
- 1-2% increase expected
Sources
From Hotel Booking To Flight Booking, New GST Rates Make Travel Cheaper; Just Follow These Tips
GST reform: Indian companies likely to witness up to 7% growth in revenues after new rates, says Crisil
Ajit Ranade: India should split GST revenues 60:40 in favour of states
GST is not just an economic measure, it’s also a moral one. New tax slabs show that
