The Indian stock market experienced a downturn today, with the Sensex falling approximately 100 points and the Nifty slipping below the 24,600 mark. This decline occurred amid investor caution, influenced by global uncertainties and anticipation surrounding the Goods and Services Tax (GST) Council meeting taking place September 3-4, 2025.
Several factors contributed to the market's subdued performance. The shift of the Nifty expiry day from Thursday to Tuesday introduced volatility as traders adjusted to the new norm. Global cues also played a role, with mixed trading in Asian markets and lower trading in European markets.
The 56th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman, is a key event influencing market sentiment. The council, including ministers from all states and Union Territories, is discussing potential revisions to tax slabs and the Centre's proposed "next-gen" GST reforms. These reforms could significantly impact various sectors and the overall economy.
The Centre has suggested a simplified three-rate structure of 5 percent and 18 percent, along with a higher 40 percent slab for sin goods and luxury items, replacing the current seven-tier structure. Tax cuts are expected on daily essentials like toothpaste and shampoo, potentially reducing them to 5 percent from 18 percent. Electronics, including televisions and air conditioners, may see a reduction to 18 percent from 28 percent, which could boost sales during the festive season. The council is also considering lowering the GST on hybrid cars to 18 percent, while two-wheelers with engine capacity below 350cc may also benefit.
The GST Council's meeting is considered a major tax overhaul, potentially providing economic relief to the common person, farmers, the middle class, and micro, small, and medium enterprises (MSMEs). These tax cuts are also expected to improve consumer demand. The outcome of the meeting and the implementation of the proposed GST reforms are expected around Diwali and will be closely watched by investors and businesses alike.
