GST 2.0: Industry Leaders Welcome GST Reform, Expect Surge In Festive Season Sales

Industry leaders have welcomed the transformative changes to the goods and services tax system, which came into effect on Monday, Sept. 22.

The GST Council recently approved a simplified rate structure that replaces the earlier four-tier system of 5%, 12%, 18%, and 28% with just two primary slabs of 5% and 18%. Additionally, a higher rate of 40% will now apply to select categories such as high-end vehicles, tobacco, and other sin goods.

Ajay DD Singhania, MD and CEO of Epack Durable, expressed optimism over consumer sentiment ahead of the festive season. "We are seeing great enthusiasm in the durables segment. The demand for both air conditioners and TVs for the festive season looks good," he said.

"Almost all the brands have committed to passing on the GST benefit to the end consumer, with the intention to at least liquidate the inventory and then catch up on the upcoming season," Singhania told NDTV Profit.

The hospitality sector is also expected to benefit from the revised GST rates, as yield for hospitality will improve due to the rate cut, commented Vishal Vithal Kamat, Executive Director, Kamat Hotels India Ltd.

"There will definitely be an uptick due to the festive and holiday season," he said.

Kamat noted that there definitely is going to be a lot of demand during the festive season. But we would have to see from the 5% rate cut; that would make staying cheaper but won't necessarily spur new demand, as we already have a demand.

"For the hospitality business, the margins can definitely improve because of higher demand, leading to higher room tariffs and leading to better yield overall," he noted. "Margins will improve on account of higher demand," he further added.

We have actually considered a delta of around 7-8% in our sales forecast, and we have bought our inventory according to that, as per Akash Agarwal, Whole-Time Director, V2Retail Ltd.

"Today is the judgement day; next week we will find out how much it will actually translate to," Agarwal told NDTV Profit.

"The upcoming 3 months are the biggest quarter for us. The timing couldn't be better," he said.

FADA is really happy with the GST reforms, as for a long time the entry-level segments of the two-wheelers and four-wheelers have been seeing a lot of headwinds, said CS Vigneshwar, President, FADA.

"With this GST reform there will be a sizeable gap in terms of customers," he told NDTV Profit.

"In the last 25-30 days, we have seen robust enquiries and bookings," shared CS Vigneshwar. "The rate cuts have been long awaited, and they will help us for the next years to come," he added.