GST Reforms for a New Generation
Introduction
The Goods and Services Tax (GST) reforms introduced in September 2025 represent a landmark step in reshaping India’s taxation system to better serve the aspirations of its youth. By simplifying tax structures, reducing rates across key industries, and addressing long-standing anomalies, these reforms are designed to create an enabling environment for entrepreneurship, job creation, and affordable living. Sectors with high youth participation—such as education, automobiles, technology, handicrafts, footwear, healthcare, food processing, and textiles —have been prioritized to lower costs, boost competitiveness, and encourage innovation. Beyond reducing the financial burden on households and businesses, the reforms strengthen India’s vision of inclusive growth, sustainability, and empowerment of the next generation.
GST Reforms for Promoting Jobs, Businesses and Startups
The government has introduced a simplified GST structure with significant rate reductions across key sectors of trade and commerce. Essential industries such as leather, footwear, paper, textiles, handicrafts, toys, packaging, and logistics have been covered under this reform. The aim is to boost the present businesses and startups and incentivise the youth to enter into businesses and initiate startups.
By lowering GST slabs to 5% on several goods and rationalising rates in transport and allied sectors, the reforms aim to reduce costs for consumers, ease compliance for traders, and enhance competitiveness for Indian businesses.
GST Rationalisation for Leather and Footwear Industry
The leather and footwear sector is a key employer, directly benefitting the youth, in India, with a strong export base. GST rationalisation here reduces the burden on young manufacturers and makes products more accessible to the consumers.
- GST has been reduced from 12% to 5% on chamois leather, composition leather with a basis of leather or leather fibre, and leather prepared after tanning or crusting.
- Footwear priced up to Rs.2500 per pair now attracts just 5% GST, directly benefiting young consumers.
- GST on supply of job work in relation to hides, skins, and leather (falling under chapter 41) also cut from 12% to 5%, reducing MSME production costs, encouraging young entrepreneurs.
GST Rationalisation for Wood Industry
Agro-based and eco-friendly wood substitutes see lower taxation, encouraging sustainable manufacturing and MSME competitiveness.
- GST reduced from 12% to 5% on rice husk board, glassfibre reinforced gypsum board, cement bonded particle board, jute particle board, bagasse board, sisal fibre board, etc.
- Sheets for veneering, bamboo flooring, casks, barrels, vats, tubs of wood are also included.
- The aim is to support MSMEs in wood manufacturing and promote eco-friendly alternatives.
GST Rationalisation for Handicrafts Industry
The handicrafts sector, vital for young artisans and exporters, benefits from tax rationalization, making traditional goods more affordable and globally competitive.
- GST cut from 12% to 5% on idols made of wood, stone, and metals.
- GST reduction also applies to paintings, drawings, original engravings, handcrafted candles, carved wood products, handbags including pouches and purses, stone art ware, stone inlay work, tableware and kitchenware of clay & terracotta.
- It further covers glass statutes, artware of iron, aluminium, brass/copper, etc.
- These reforms strengthen India’s cultural economy and young artisanal livelihoods.
