reduce complexity, improve compliance and lower costs

New Delhi: In response to the adverse external developments, especially around US tariffs, the government has sought to soothe the economic impact by revitalising consumption, among other measures, with the GST 2.0 reforms, a report said on Monday. The GST Council's decision to simplify the structure with just three slabs -- 5 per cent for essentials, 18 per cent for standard goods and services, and 40 per cent for sin and luxury items -- is expected to reduce complexity, improve compliance, and lower costs for businesses, especially MSMEs, SBI Mutual Fund said in its report. The consumers will benefit from rate reductions on a large number of daily-use items, small cars, two-wheelers, health insurance, farm equipment and cement, among many other categories. This initiative follows earlier steps to stimulate demand, including personal income tax cuts and easing retail lending norms. Enthused by policy support, consumer-facing sectors are already the best performers in the month gone by, the report noted.