GST Overhaul 2025: What Gets Cheaper and Costlier Under New Tax Slabs

Welcome Back Investor!

India’s services sector is on fire - August PMI soared to 62.9, the highest in 15 years, fueled by strong demand and export orders. But the boom comes with a sting: output prices hit a 12-year peak and input costs are climbing fast, raising inflation worries. The broader economy looks equally strong, with the Composite PMI hitting a 17-year high of 63.2. Yet, a new U.S. tariff of 50% on Indian goods could test how long this growth streak lasts.

Let’s dive in!

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▪️ Impact News

▪️ Markets

▪️ Everything else you need to know today

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IMPACT NEWS

GST Overhaul 2025: New Tax Slabs to Reshape Prices

India’s 56th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, is gearing up for the most ambitious tax revamp since GST’s rollout in 2017. The council is proposing to collapse the four existing slabs (5%, 12%, 18%, 28%) into just two - 5% and 18% - while imposing a hefty 40% tax on luxury and sin goods.

What could change for consumers:

• Cheaper basket: Everyday essentials like paneer, butter, coconut water, pasta, and even life-saving drugs could see taxes drop from 12% to 5% or even 0%.

• Lifestyle relief: Goods once taxed at 28% - such as small cars, motorbikes under 350cc, auto parts, movie tickets, and hotel stays - may shift to 18%, delivering a festival-season boost.

• Luxury pinch: Premium electric cars priced above ₹20 lakh could face 18% GST, while ultra-luxury imports may be taxed at 40%.

The Composite impact: Consumers win with lower costs, and companies like HUL, Maruti, Samsung, and Sony could see a demand surge. However, states are worried - this overhaul could shave off nearly ₹50,000 crore ($21 billion) in revenues, sparking concerns about compensation.

MARKETS

Indian markets closed higher on today, with the Sensex gaining 410 points to 80,567 and the Nifty 50 up 135 points at 24,715, as upbeat sentiment flowed across sectors. Metal stocks led the rally, jumping over 3% on optimism from China’s steel capacity cuts and stronger global pricing, while auto and consumer shares climbed on hopes of GST Council tax cuts ahead of the festive season. Adding fuel, India’s services PMI hit a 15-year high, signaling robust demand and economic strength.
_{Closing figures as on 03.09.25 (3.30pm IST)}

🔎 In Focus

Stock Performance:

Top Gainers

✅ SAIL (+5.35% at ₹129.68): Steel stocks surged after reports of China cutting steel output and firm export demand, boosting hopes of higher domestic prices. Falling input costs also added momentum.

✅ Glenmark (+4.46% at ₹2,004.40): The pharma stock jumped after its US launch of Eribulin Mesylate injection and strong brokerage calls. Heavy volumes and option activity around the ₹2,000 mark amplified the rally.

✅ Yes Bank (+4.09% at ₹20.35): Shares rose as the Competition Commission of India approved Sumitomo Mitsui Banking Corp’s stake purchase, sparking optimism about stronger capital and strategic backing.

✅ Poonawalla Fincorp (+4.04% at ₹442.95): NBFC stocks gained broadly, and Poonawalla rose on the back of recent strong AUM growth updates and positive risk appetite. The stock is also trading near recent highs, attracting fresh buying.

Top Losers

🔻 JK Cement (-3.41% at ₹6,755.50): The cement maker fell on profit-booking after a strong YTD rally of over 50%. Investors locked in gains as analysts flagged near-term challenges in capacity expansion.

🔻 Phoenix Mills (-3.40% at ₹1,512.40): Despite a Motilal Oswal upgrade to ‘Buy’, the stock slipped on high-volume churn and midcap volatility. Traders took profits after the recent rally in real estate counters.

🔻 MRF (-2.17% at ₹1,50,550): Tyre major MRF cooled off after hitting record highs yesterday. Analysts pointed to valuation concerns and profit-taking as the main reasons for today’s dip.

🔻 UNO Minda (-1.97% at ₹1,283.20): The auto components player saw a mild pullback after making a new all-time high yesterday. While long-term EV demand tailwinds remain, short-term consolidation weighed on the stock.

INDIA FRONTIER

Everything else you need to know today

🛍️ Tax Revamp: India’s finance ministers are convening for two days to plot the boldest GST shake-up in eight years - slashing rates on over 400 everyday items (like toothpaste, TVs, and even small cars) from four tiers down to just 5% and 18%, while hiking luxury and sin taxes to 40%.

🌐 Outage: A sudden global glitch knocked ChatGPT offline - Downdetector lit up with hundreds of reports in under 20 minutes, yet OpenAI hasn’t issued a response.

🍽️ Fee Rise: Zomato just hiked its platform fee from ₹10 to ₹12 per order amid the festival frenzy - translating to a whopping ₹3 crore in daily revenue at scale. Plus, they’re testing a ₹50 “VIP Mode” with lightning-fast deliveries and concierge perks.

🛡️ Not Dismantled: In a landmark antitrust ruling, a U.S. judge declared Google's search dominance an illegal monopoly - but stopped short of forcing a breakup or sale of. Google must ditch exclusive search deals and share some data with rivals, but gets to keep its browser and strategic edge intact.

SPECIAL

How Coal India Plans a Future Beyond Fossil Fuels

India’s largest coal producer, Coal India Ltd. (CIL), is making a bold leap toward clean energy, signaling a future that stretches well beyond its traditional fossil-fuel stronghold. The state-run miner has launched tenders for 5 gigawatts (GW) of renewable energy projects - with 3 GW earmarked for solar and 2 GW for wind - marking its most ambitious diversification push to date.

This pivot comes at a critical moment. Global coal demand is plateauing, while governments and industries are accelerating their shift toward sustainable alternatives. For Coal India, long seen as the backbone of India’s power sector, the move is more than just optics - it’s a survival strategy. By betting big on renewables, the company is positioning itself to capture a slice of India’s rapidly expanding green energy market.

But that’s not all. CIL has doubled its renewable energy ambitions, setting a target of 9.5 GW of installed capacity by March 2030, a meteoric jump from the modest 200 megawatts it manages today.

THE HANOOMAAN INSTITUTE

🌍 Inflation’s Ripple: What Can Learn from Rising Import Costs

Inflation isn’t just about higher grocery bills - it’s reshaping consumer behavior in ways that ripple across industries. In 2025, middle-class Americans are feeling the pinch as five key imported goods - electronics, cars, clothing, furniture, and coffee - become increasingly unaffordable due to rising costs.

For consumers, this matters. Why? Because when essentials get expensive, discretionary spending shrinks. Consumers delay upgrades, choose substitutes, or trade down. That shift creates both risk and opportunity.

📉 Risk: If your product depends heavily on imported supply chains or luxury positioning, margins and demand may tighten faster than you expect.
📈 Opportunity: The same squeeze drives demand for affordable alternatives, local substitutes, and value-driven solutions. Just look at how D2C coffee brands, refurbished electronics startups, and sustainable clothing lines are stepping up.

Consumers that thrive in inflationary cycles are the ones that:

• Build resilient supply chains (local + diversified).

• Position their offering as value without compromise.

• Lean into messaging that resonates with frugality and necessity, not just aspiration.

💡 Inflation doesn’t just challenge households - it challenges founders to innovate. If consumers can’t afford “imported,” they’ll look for accessible, local, and smarter alternatives. That’s where the next wave of unicorns may rise.

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Daily Breakout
by - Docdsharma

Market Capitalization > 300 and 
Return on equity > 15 and 
Debt to equity < 0.5 and 
EPS last year >20 and 
Sales growth > 20 and 
Promoter holding > 60 and 
Volume > 100000

Thanks for reading.

Until tomorrow!

Hanoomaan India Business team

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