Updated: 12:25 PM – India’s biggest GST rationalisation since 2017 began rolling out in late September 2025 — and unlike earlier reforms that took months to show up in the economy, this time the impact was visible almost instantly within 2 months. GST rates on more than 375 mass-consumption items were slashed.
The major slab shifts, such as:
- 18% → 12% (home appliances, toiletries, packaged items)
- 12% → 5% (personal care, household goods, footwear)
- 5% → 0% (select essentials)
- Some non-luxury goods moved from 28% → 18%
- Also, Heavy GST upto 40% on (sin and luxury stuffs) – tobacco products, caffeinated and sugar-sweetened beverages, luxury vehicles, yachts, and private aircraft.
These cuts are just weeks before India’s peak festive season and lots of holidays. A perfect storm for high consumption, lower inflation, and a measurable economic shift.
Below are the 7 biggest changes India witnessed in October–November 2025, it is backed by examples, tables, and real-world data –
1. Inflation Dropped Faster Than Expected
October CPI collapsed to 0.25%, one of the lowest monthly readings in years. Economists estimate GST cuts alone pulled inflation down by 0.12 percentage points.
Inflation Table (Impact After GST Cut)
| Month | CPI Inflation | GST Impact |
|---|---|---|
| Sept 2025 | 1.10% | — |
| Oct 2025 | 0.25% | –0.12% |
Example:
A mixer-grinder with an MRP of ₹2,500 earlier carried 18% GST (₹450 tax). After the cut, GST is 12%, making the tax only ₹300 — saving ₹150 instantly.
Source – Why India’s 0.25% Inflation Is NOT Fully Good News — The Hidden Risks No One Is Talking About
2. Festival Sales Hit a 10-Year High
Navratri and pre-Diwali sales surged across India. Retailers reported footfall similar to pre-COVID highs.
Top categories that exploded:
- LED lights
- Kitchen appliances
- Gift packs
- Mobile accessories
- Personal care items
The GST cut created a “psychological push,” encouraging buyers to spend more.
3. GST Revenue Stayed Strong Despite Lower Rates
The big surprise: GST didn’t fall — it rose.
- October 2025 GST Collection: ₹1.96 lakh crore
- Growth: +4.6% YoY
So even with lower rates, higher consumption kept revenue strong.
GST Revenue Table
| Month | GST Collected | YoY Growth |
|---|---|---|
| Oct 2024 | ₹1.87 lakh crore | — |
| Oct 2025 | ₹1.96 lakh crore | +4.6% |
This means India consumed more, exactly what the GST cut intended.
Source – How Small-Town India Outperformed Big Cities in October’s ₹1.96 Lakh Crore GST Collection
4. Insurance Sector Got a Demand Boost
With GST reduced on select parts of life and health insurance premiums, policies became slightly cheaper.
- New business premium (Oct 2025): +12.1%
- Term plans and health covers saw maximum traction
Example:
- A health insurance premium of ₹25,000 earlier carried 18% GST (₹4,500).
- After a rate revision on components, the effective GST dropped, reducing the total payable premium.
5. Everyday Consumer Goods Became Cheaper
Over 375 FMCG and household items got price reductions.
Categories impacted:
- Detergents
- Soaps
- Kitchen essentials
- Small appliances
- Packaged snacks
- Toys
- Footwear under ₹1,000
Consumers reported “visible price drops” across retail shelves.
6. MSMEs See Loan Surge After GST Cut
GST cuts have triggered a sharp rise in MSME borrowing as lower tax slabs improved margins and boosted expansion plans. Banks report strong traction in the September–November period, with digital MSME loans rising fastest.
| Bank | Key MSME Data | Impact |
|---|---|---|
| IOB | ₹48,000 cr (target ₹51,000 cr); YoY +16.7% | Expansion driven by GST savings |
| SBI | 2.3 lakh digital MSME loans; ₹74,434 cr | 45-minute sanctions boost demand |
| Indian Bank | MSME growth up from 6% → 17% | Hospitality & services lead |
| PNB | Loans up to ₹100 cr, digital up to ₹5 cr | Faster approvals, lower risk |
GST cuts + cheaper credit = MSME expansion wave.
External source – Times of India
7. Affordable Electronics & Durables Saw Strong Demand
Reduced GST on budget electronics helped millions of middle-class buyers.
Products with the biggest boost:
- LED bulbs
- Grinder-mixer
- Water purifiers
- Budget smartphones
- Fans & coolers
Retailers, especially in Tier-2 & Tier-3 cities, reported almost 20–25% higher sales during peak festival days.
EaseMoney – The Pro Analysis
From a macro perspective, India’s GST cuts in 2025 achieved what tax reforms rarely accomplish: quick economic transmission.
Unlike previous reforms that stayed “on paper” for months, consumers felt the relief immediately — and the economy responded with stronger consumption.
This GST shockwave created a powerful cycle:
- Cheaper goods → bigger spending
- Bigger spending → stable GST revenue
- Stable revenue → lower inflation pressure
- Lower inflation → room for policy flexibility
