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GST 2.0 rollout is set to boost mass-market demand and formalisation, says Emkay Global Financial Services.
New GST rates having two slabs of 5% and 18% and a special slab of 40% for sin goods will come into effect from September 22.
The rollout of GST 2.0 is expected to boost consumption, with mass-market demand benefiting from greater formalisation, while premium consumers are likely to seek more differentiated products, according to a report released Tuesday.
Emkay Global Financial Services noted that favourable macro conditions continue to justify the sector’s high valuations, even though clear growth momentum is still awaited.
“The rally in anticipation of the GST 2.0 announcement has been rewarding. As we now factor in the benefits and revise target prices higher for select stocks, our investment calls remain unchanged,” the brokerage said.
As per the proposed structure, the weighted GST rate is estimated at 6% for food and beverages and 12% for home and personal care (HPC).
GST 2.0 brings broad-based rate rationalisation across essential food and personal care categories. While most home care products remain in the 18% slab, several daily-use personal care items saw rate cuts, with discretionary goods continuing at 18%.
In a sweeping reform, the GST Council, led by Finance Minister Nirmala Sitharaman, has approved a sharp overhaul of the Goods and Services Tax (GST) structure. Effective September 22, the system will be simplified into just two main slabs of 5% and 18%, replacing the current 12% and 28% rates, with a special 40% slab for luxury and sin goods. Billed as a “historic Diwali gift” for citizens and businesses, the reforms aim to lower the cost of living, boost consumption, and spur economic activity.
Household products like hair oil, shampoo, toothpaste, toilet soaps, shaving cream and toothbrushes will now attract just 5% GST instead of 18%. Rates on butter, ghee, cheese, packaged namkeens, dairy spreads and utensils have been cut from 12% to 5%. Feeding bottles, clinical diapers and sewing machines too move into the lowest slab.
The government stressed that the new “Next-Gen GST” will not only cut taxes across critical sectors but also simplify compliance, reduce burden on consumers and businesses, and provide fresh momentum to growth.
(With IANS Inputs)
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
September 09, 2025, 14:25 IST
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