In a timely move ahead of Diwali, the government has announced a reduction in Goods and Services Tax (GST) rates on a range of popular consumer items. The decision aims to ease inflationary pressure, stimulate demand, and boost market sentiment during India’s biggest shopping season.
The GST Council approved the cuts during its October 2025 meeting, offering relief on automobiles, daily essentials, and electronics — categories that typically see massive sales during Diwali.
Cars and Two-Wheelers to Cost Less
Automobile buyers have a reason to celebrate. The GST on cars and two-wheelers has been reduced by 3%, making both entry-level and mid-range models more affordable. Auto dealers expect this move to accelerate festive bookings, particularly for compact cars and commuter motorcycles, which are witnessing strong demand in urban and rural markets alike.
Relief for Food Lovers: Ghee, Butter, and Packaged Foods
For households, the biggest relief comes in the form of cheaper ghee, butter, and packaged food items. These essentials, often used heavily during Diwali festivities, have seen a GST cut from 12% to 5%. FMCG companies are expected to pass on the benefits directly to consumers, lowering the cost of sweets, snacks, and festive hampers.
Affordable Footwear and Home Appliances
The GST on footwear priced under ₹2,000 has been reduced from 12% to 8%, making festive shopping easier on the pocket. Similarly, high-value home appliances like air conditioners and large televisions (above 42 inches) have seen a 4% GST reduction, making them more accessible for middle-class households looking to upgrade during Diwali sales.
Boosting Festive Sales and Consumer Sentiment
Retailers across India have welcomed the move, predicting a 15–20% jump in festive sales across categories. The GST cut aligns with the government’s efforts to revive consumption and support manufacturing and retail sectors.
With prices dropping across automobiles, essentials, and electronics, this Diwali promises not just brighter homes — but lighter bills too.
