Overview

• The Council meets on September 3–4 to consider collapsing most GST items into 5% and 18% slabs with a narrow higher band for sin and luxury goods that could reach about 40%.
• Ambit Capital estimates a GST cut has a 1.08x multiplier and could lift GDP growth by 20–50 basis points if businesses pass the reductions to consumers.
• Rationalisation may cost ₹70,000 crore to ₹1.8 lakh crore a year, with roughly two-thirds of the hit falling on states, prompting talk of steeper sin rates and other revenue measures.
• Media reports detail possible category moves, including shifting most 12% items to 5% and many 28% goods to 18%, with CNBC-TV18 reporting proposals to lower taxes on medicines and exempt some cancer drugs.
• Nomura, ICRA and BMI see limited near-term demand gains, warning of pre-implementation purchase deferrals and modest overall impact even as reforms could help offset external tariff headwinds.