Booster for employment, production

Lower goods and services tax (GST) rates in labour-intensive sectors such as textiles, footwear, gems and jewellery, and allied industries are expected to generate new employment opportunities by fuelling demand and spurring manufacturing amid global turbulence triggered by the US tariff actions.

- Dhirendra Kumar & Devina Sengupta

The GST Council Wednesday night scrapped the 12% and 28% slabs, retaining only 5% and 18%, while lowering or eliminating GST on several items. The new rates will take effect from 22 September, ahead of the Diwali season.

Industry experts said the tax cuts would not only revive demand but also cause companies that were planning layoffs amid rising costs and weak exports to reconsider. Sectors such as textiles and footwear, which employ millions in small and medium units, have been facing severe cost pressures and are thus key beneficiaries of the GST cuts.