Archive · 7 Sep 2025
GST Rate Cuts Boost Consumer Spending, Says Report
The government has cut taxes on many everyday items, like soaps and shampoos, from 12-18% to just 5%.
This should help companies that sell these items, like grocery stores and quick-service restaurants, because consumers will have more money to spend.
Apparel and footwear priced between Rs 1,000 and Rs 2,500 will now be taxed at 5% whereas those above Rs 2,500 will attract a higher GST.
The report expects companies like DMart, Trent, and quick-commerce companies to benefit.
These changes are likely to give a boost to the economy.
GST cuts are expected to boost India's consumption story, according to Bernstein.
Personal care and home care items sees a tax cut from 12-18% to 5%.
Grocery retailers like DMart and quick-commerce companies are expected to gain.
Apparel and footwear priced Rs 1,000-2,500 will have 5% GST.
QSRs will benefit from reduced GST on inputs.
- Who
- Bernstein
- What
- Report on GST rate cuts and their impact.
- When
- Recently
- Where
- India
- Why
- To analyze the effects of recent GST changes
Positive Impacts
Mixed Impacts
GST Changes Effects
Positive Impacts
Lower GST rates are expected to increase affordability and boost consumption.
Mixed Impacts
Impact on various sectors will vary based on price points and input costs, some face increased tax burdens.
- Report Source
- Bernstein
- FMCG GST Reduction
- 12-18% to 5%
- Apparel Price Band
- 5% tax for Rs 1,000-2,500
- Apparel Tax above Rs 2,500
- Increased to 18%
- QSR Benefit
- Reduced GST on inputs improves margins
