GST rejig expected to stimulate demand, ease inflation, boost ease of doing business & partially counter impact of US tariffsretail, renewables business key drivers for RIL, Tatas, Adani Group
Donald Trump signed an executive order implementing tariff cuts under a July agreement with Japan, reducing duties on Japanese automobile imports from 27.5% to 15% and formalizing a $550 billion investment pledge. Japan will increase purchases of US agricultural goods and Boeing planes, while also boosting defense spending with US firms.
The central government, driven by Prime Minister Modi’s vision, successfully convinced states to agree to significant GST rate cuts, potentially lowering prices for consumers before Diwali. Finance Minister Nirmala Sitharaman, after extensive preparation and with the PM’s backing, framed the move as pro-people, overcoming initial resistance from states concerned about revenue loss.
Starting September 22nd, air conditioners, large-screen TVs, and dishwashers will see price reductions due to GST rate cuts, potentially boosting consumption and market penetration. AC prices are expected to drop by around 8%, while larger TVs and premium dishwashers will also become more affordable. Industry leaders anticipate increased demand and long-term benefits for domestic manufacturing.
Indian passenger vehicle dealers face a potential loss of ₹2,500 crore due to the lapse of the compensation cess on September 22. Dealers holding older stock purchased at higher tax rates risk financial strain, with no clear mechanism for cess refund.
Prime Minister Narendra Modi lauded the GST reforms as a “Diwali Dhamaka,” emphasizing their role in simplifying the tax system, improving citizens’ lives, and boosting economic growth. He criticized the previous Congress regime for high taxes on essential goods, highlighting the current government’s focus on savings for common people.
Premium airfares are set to increase as the GST Council has approved raising the tax on business and first-class tickets from 12% to 18%, effective September 22, 2025. Economy class tickets and AC train travel will remain unchanged at 5%. For premium tickets booked and paid for before the deadline, the old 12% GST rate…
Many taxpayers are confused about Form 10-IEA, which is required for opting in or out of the new tax regime, especially those with business income using ITR3 or ITR4. Missing the filing deadline results in default assessment under the new regime, potentially costing taxpayers refunds as deductions are not considered. Frequent rule changes have further…
The US trade deficit surged to a four-month high in July, climbing 32.5% to $78.3 billion, as businesses accelerated imports in anticipation of new tariffs imposed by President Trump. Imports saw a significant jump, particularly in gold and capital goods related to AI, while exports experienced only a slight increase.
