New Delhi, Sept 4: India Inc on Thursday hailed the GST Council’s “forward-looking decisions” moving to two rates of 5 per cent and 18 per cent from 22 September, simplifying refunds and MSME procedures, and exempting individual life and health insurance from the indirect tax regime.
Industry bodies said the clarity will ease compliance, reduce litigation, and give businesses and consumers much-needed predictability.
The GST Council on Wednesday approved a two-tier rate structure of 5 and 18 per cent, which will be implemented from September 22.
CII Director General Chandrajit Banerjee said, “This move on GST reforms is a phenomenal milestone. By lowering rates on everyday items and critical inputs, the reforms provide immediate relief to families and strengthen the foundation for growth”.
Hemant Jain, President, PHDCCI stated: “The roll-out of GST rate rationalisation from September 22, 2025, is a landmark reform that addresses both consumer welfare and revenue efficiency. By reducing rates on daily essentials such as toiletries, packaged foods, and utensils from 18-12% to 5%, the reform will ease household budgets and stimulate demand”.
“We thank and welcome the rectification of the GST inversion in the Man-Made Fibre (MMF) value chain by aligning MMF fibre and yarn at 5 per cent from 18 per cent and 12 per cent earlier respectively. It addresses the long-standing blockage of working capital for thousands of spinners and weavers,” Confederation of Indian Textile Industry (CITI) Chairman Rakesh Mehra said.
He further stated that with over 70-80 per cent of textile and apparel units in India being MSMEs, this reform will directly benefit a large segment of the industry by easing liquidity pressures, enhancing competitiveness.
K Syama Raju, President, FHRAI (Federation of Hotels and Restaurants Association of India) welcomed the GST Council’s decision to simplify hotel room tariffs into two slabs of 5 per cent and 12 per cent.
“Reducing the tax on rooms up to Rs 7,500 to 5 per cent will make Indian hotels more affordable and attractive to both domestic and international travellers. This reform will directly boost tourism demand, increase occupancy, and encourage more spending across the hospitality value chain,” he added. (PTI)
