Amitabh Kant: GST Overhaul Is 'Bold and Visionary' — Here's How It Could Fuel Jobs & Growth (2025)

Amitabh Kant: GST Overhaul Is 'Bold and Visionary' — Here's How It Could Fuel Jobs & Growth (2025)

Amitabh Kant lauds the GST Council's decision to rationalise slabs into two main rates and a special high rate for luxury and sin goods. This piece unpacks what those changes mean for households, manufacturers and jobs, and why the timing before the festive season matters.

GST Reform 2025

Context & Announcement

On September 3, 2025, comments from former NITI Aayog CEO Amitabh Kant praised the GST Council's decision to simplify tax slabs — a move the Council enacted as part of a broader reform agenda announced by the Prime Minister. The Council has consolidated most items into 5% and 18% slabs, while placing sin and ultra-luxury items into a new 40% rate.

What Changed: The New GST Structure

The previous 12% and 28% slabs were removed. Essentials like toiletries, kitchenware and many household goods now attract 5% GST; a large swathe of goods and services remain at 18%. The 40% slab targets sin and high-end luxury goods, with GST charged on retail prices for these items.

Why It Matters: Jobs, Consumption & Industry

Kant argued the simplification will boost consumption by lowering effective prices on essentials, increasing capacity utilisation and prompting firms to invest in expansion. Greater demand and investment can translate into fresh jobs across manufacturing, retail and logistics — stimulating household incomes and economic momentum.

Sector-wise Impact

  • Textiles & MMF: Removal of inverted duties benefits man-made fibres, potentially making India more competitive in global apparel markets.
  • Electric Vehicles: Keeping GST at 5% for EVs supports scaling of domestic manufacturing and incentivises consumers.
  • Healthcare & Education: Broader exemptions and lower rates reduce costs for households and educational institutions.
  • Automobiles: Smaller cars and certain categories have moved to 18%, while ultra-luxury categories face the 40% rate.

Timing & Implementation

The new tariff structure is scheduled to take effect from 22 September 2025, positioning the reforms ahead of the festive season — a deliberate move to boost consumption during Navratri and Diwali.

Expert Opinions

Supporters praise predictability and simpler compliance; critics caution about revenue implications and classification disputes. Kant emphasised structural fixes like eliminating inverted duties and urged follow-up steps (for example, removing certain quality control orders) to unlock manufacturing potential.

FAQs

Q: When does the new GST structure start?
A: It takes effect on 22 September 2025.

Q: Which items moved to 5%?
A: Many everyday essentials, from toothbrushes to basic kitchenware, are now in the 5% bracket.