GST OVERHAUL

KEY SECTORAL GAINS AND SHIFTS

- Nitasha Chawla writes

From daily essentials to big-ticket purchases, the new GST regime comprehensively redraws India’s tax map, reshaping costs and consumer impact across key industries.

India’s Goods and Services Tax (GST) regime has undergone its most significant revision since its launch in 2017. Populatly called “GST 2.0,” the overhaul collapses the earlier four-tier tax structure into three main slabs — 5%, 18%, and 40% — while also expanding the list of exemptions. This structural shift is designed to simplify compliance and redistribute the tax burden across essential, mid-market and luxury segments. Below is a sector-wise look at how the changes affect different industries — which ones gain from lower rates and which ones face a heavier burden.

The fast-moving consumer goods (FMCG) sector is among the largest beneficiaries of the revised rates. Daily-use items such as soaps, toothpaste, shampoos, packaged foods and basic household products have been moved to the lowest slab of 5% from the previous 12% or 18% categories. This reduces the effective tax on both consumers and producers. Lower GST on input materials, packaging and logistics also eases cost pressures. While this benefits mass-market and value brands the most, premium or specialty items that remain in the 18% slab see relatively less relief. Overall, the restructuring makes many everyday products cheaper, which can boost consumption volumes and rural demand.