Liberalisation & Industrial Policy

Amid apprehensions that businesses might not fully pass on the benefits of recent GST rate reductions to consumers, the Union Finance Ministry has directed its field formations to compile detailed monthly price data on a range of common-use items before and after the new rates take effect on September 22, 2025. This move follows the GST Council's decision to simplify the tax structure into a two-slab system, aiming to ensure transparency and prevent profiteering as part of the broader GST 2.0 initiative.

The 56th GST Council meeting has introduced significant rate reductions on inputs in key sectors like textiles and fertilizers, easing the inverted duty structure where input taxes exceed output taxes. However, persistent wide gaps between these rates continue to raise concerns among industries, primarily due to delays in input tax credit refunds and resulting working capital blockages, prompting calls for faster processing mechanisms.