According to market expert Anil Singhvi, the government’s recent GST reforms amount to a mini budget, delivering one of the biggest tax relief packages since the 2019 corporate tax cuts. These sweeping GST rate reductions cover almost all sectors where relief was expected and promise to stimulate consumption, business growth, and market confidence.
“This is not a cosmetic change but a major reform done with full intent. It is perhaps the biggest GST cut we have seen, benefiting nearly every sector that needed it,” Singhvi said.
Major GST cuts across the board: Who benefits?
Small Cars: GST cut from 28–31 per cent to 18 per cent on vehicles under 4 meters with petrol engines up to 1,200 cc or diesel up to 1,500 cc.
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Large SUVs: GST lowered from 43–50 per cent to 40 per cent.
Electric Vehicles: Continue enjoying concessional 5 per cent GST.
Two-Wheelers: Bikes under 350 cc see GST fall from 28 per cent to 18 per cent; above 350 cc taxed at 40 per cent.
Commercial Vehicles: GST cut from 28 per cent to 18 per cent.
Tractors and Agricultural Machinery: GST slashed from 12 per cent to 5 per cent, increasing affordability for farmers.
GST reforms: Sector winners and stocks to watch
1) Life and Health Insurance (GST now zero): LIC, HDFC Life, SBI Life, ICICI Prudential, Motilal Oswal Financial Services, Niva Bupa
2) Two-Wheelers, Small Cars, Auto Parts (GST 28 per cent to 18 per cent): Eicher Motors, Hero MotoCorp, TVS Motors, Ashok Leyland
3)Small Tractors (GST 12 per cent to 5 per cent): Mahindra & Mahindra, SML Isuzu, Swaraj Engines
4) Cement (GST 28 per cent to 18 per cent): Ultratech Cement, Shree Cement, Ambuja Cement
5) Electronics (TV, AC, etc., GST 28 per cent to 18 per cent): Voltas, Blue Star, Dixon Technologies, Amber Enterprises
6) Daily Food Items (Butter, ghee, cheese, namkeen, dry fruits GST cut to 5 per cent): ITC, Nestle, Britannia, Dabur, Marico, ADF Foods
7) Chocolate and Coffee (GST cut from 18 per cent to 5 per cent)
8) Daily Essentials (Soap, shampoo, toothpaste GST cut from 18 per cent to 5 per cent): Godrej Consumer Products, Hindustan Unilever, Patanjali
9) Medicines (Cancer drugs zero GST, others cut from 12 per cent to 5 per cent): Mankind Pharma
10) Kitchenware and Chimneys (GST 12 per cent to 5 per cent): La Opala, Carysil, Butterfly Gandhimati
11) Hotels (Rooms under Rs 7,500 GST cut from 12 per cent to 5 per cent): Lemon Tree, Royal Orchid, Taj GVK, Park Hotels
12) Agrochemicals and Fertilizers (GST 12 per cent to 5 per cent): Rashtriya Chemicals & Fertilizers, FACT, Chambal Fertilizers, Coromandel International
Economic impact and market outlook
Market expert Anil Singhvi noted the government will lose approximately Rs 48,000 crore in GST revenue initially but expects this loss to be made up by higher consumption and economic activity.
“These GST reforms lay the foundation for a major market rally,” Singhvi said. “Nifty could soon target the 24,950 to 25,150 range.”
He added that the tax cuts would ease tariff tensions and support economic growth but cautioned that challenges remain: resolving tariff issues, boosting corporate earnings, and curbing foreign institutional investor selling pressure.
The expert expects growth to improve from October to March, driven by these reforms.
The ITC Factor: What investors should know
Singhvi warned investors to keep an eye on the Input Tax Credit (ITC) impact. While consumers clearly benefit from lower GST rates, companies may not see proportional profit increases because of ITC adjustments.
“Certain sectors, such as insurance, pharmaceuticals, cement, personal care, and budget hotels, may see limited benefit because of ITC restrictions,” he explained. “Net-net, companies’ profits depend on the balance between increased volumes and ITC limitations.”
