Finance Minister Nirmala Sitharaman has announced that recent Goods and Services Tax (GST) rate cuts are effectively benefiting consumers, with many items experiencing significant price drops. Speaking at a press conference, Sitharaman highlighted the government's active monitoring of 54 key items to ensure that the tax benefits are being passed on to end-users.

"For every item I have monitored, which affects the day-to-day life of citizens, the weighted average of the reduction is being passed on, and in some cases, even more. The impact of these new GST rate cuts is remarkable," Sitharaman stated. She noted that while some products, like high-end Portland cement, saw a smaller-than-expected pass-through, the overall trend indicates lower prices for consumers.

The GST reforms, implemented on September 22, 2025, the first day of Navratri, have been welcomed by consumers across the country. The changes include rate cuts from 12% to 5% and from 28% to 18% on a majority of goods. The revised structure aims to simplify the rate structure, ease compliance, promote formalization, and boost consumption through lower prices. India has moved from a four-slab system (5%, 12%, 18%, 28%) to primarily 5% for essential items and 18% as the standard rate, with a 40% demerit slab for sin and luxury goods.

The Finance Minister addressed concerns about the effectiveness of the rate cuts, stating that the government is convinced that companies are passing on the benefits to consumers. In instances where this was not the case, the Department of Consumer Affairs has stepped in. Sitharaman revealed that the department has received 3,169 complaints related to non-reduction in prices commensurate with the GST cut, and 3,075 of these complaints have been forwarded to nodal officers in the Central Board of Indirect Taxes and Customs (CBIC). So far, 94 complaints have been resolved. To improve the grievance redressal process, a new functionality will be enabled on the reporting portal, allowing complaints to be directly forwarded to the chief commissioners of the respective zones.

The GST Council's decision to reduce rates is expected to have a far-reaching positive impact. By reducing the tax burden on a wide range of goods and services, the government aims to stimulate demand and encourage consumer spending. This, in turn, is expected to boost economic growth and create new employment opportunities.

Several reports suggest that the GST reform is having a visible impact, with traders and consumers reporting significant benefits. Shopkeepers indicate that the reduction in GST rates has led to a noticeable drop in prices, which has spurred consumer demand and resulted in higher sales volumes. A local FMCG product seller in Raipur stated that their business has doubled compared to last Diwali, attributing the surge to reduced taxes on various products.

Consumers have also echoed positive sentiments, with many noting that prices have fallen considerably since the GST reform, drawing large crowds to markets. One resident reported saving Rs 2,000 on a refrigerator purchase due to the revised GST rates, even enabling them to buy an additional appliance.

Crisil Ratings noted that the revised GST tax rates would benefit key consumer items, covering about a third of an average consumer's monthly expenditure. These items include essentials like milk products, discretionary goods like automobiles and beauty services, and high-demand items such as processed food.

However, a LocalCircles survey revealed that a significant portion of consumers are yet to fully benefit from the GST reduction on hotel rooms priced at ₹7,500 or less. The survey found that only 16% of consumers reported receiving the full benefit, while 56% received partial benefit, and 28% reported no reduction at all. This discrepancy highlights the challenges in ensuring that the intended benefits of GST cuts reach the end consumer, particularly in sectors where businesses may adjust base rates or reduce discounts.

Despite these challenges, the Finance Minister remains optimistic about the positive impact of GST 2.0 on consumption trends and economic growth. Sitharaman emphasized that GST reductions are not limited to festive discounts and are expected to sustain demand even after the season.