CII on GST reforms

CII Andhra Pradesh wholeheartedly welcomed the recent changes announced under the Goods and Services Tax (GST) regime by Nirmala Sitharaman, Union Minister of Finance, terming the changes timely, progressive, and reflective of the government’s commitment to foster a business-friendly environment.

In a statement, Murali Krishna Gannamani, Chairman, CII Andhra Pradesh and CEO, Fluentgrid Ltd, remarked that the landmark decisions taken at the 56th meeting of the GST Council marks a decisive step towards simplification, affordability, and economic momentum. The sweeping reduction of GST rates on essential goods such as dairy products, medicines, and everyday household items, along with reforms in processes and institutional strengthening, will directly benefit consumers, the aspirational middle class, and industry alike. For businesses, especially in manufacturing and infrastructure, lower tax incidence and correction of duty distortions will improve project viability and margins. By reducing the cost of capital goods and inputs, the reforms create an enabling environment for private investment. This aligns with the government’s larger objective of crowding in private capital to sustain India’s growth trajectory.

He said the sharp cut in GST on cement from 28% to 18% is a game changer. Cement is a core input for housing and infrastructure. Lower costs here will cascade into more affordable housing, improved infrastructure viability, and faster rollout of capital projects. Similarly, reductions in GST on air-conditioners, TVs, and automobiles will expand demand in consumer durables and automotive sectors. For manufacturing, the correction of inverted duty structures in textiles and fertilizers removes long-standing inefficiencies. By reducing working capital blockages and making value chains more competitive, these changes will boost both domestic production and exports.

Handicrafts, leather, stone products, and textiles—industries that employ millions of workers—stand to gain immensely from lower GST rates. By reducing the tax incidence, these reforms enhance market competitiveness and encourage greater formalisation. MSMEs, which often face disproportionate compliance and cost burdens, will find it easier to scale their operations.

According to S. Narendra Kumar, Vice Chairman, CII Andhra Pradesh and Executive Director, Apex Solutions Pvt Ltd, stated that this is not just a fiscal reform. It is a reform with a strong human face. It addresses the needs of farmers, workers, small businesses, middle-class households, and large industries alike. The inclusivity of the approach is what makes these decisions truly path-breaking. Hospitality, wellness, and fitness services have all moved to lower tax slabs. This will make tourism, gyms, yoga centres, and salons more accessible to middle-class households while stimulating demand in a rapidly expanding services sector. Affordable hospitality will also support domestic tourism, adding to job creation across India’s towns and cities, he stated.