CS Setty Hails GST Rationalization as Landmark Reform to Boost Growth and Competitiveness

Mumbai, September 5: CS Setty, Chairman of the Indian Banks’ Association (IBA) and State Bank of India (SBI), has welcomed the government’s decision to rationalize the Goods and Services Tax (GST) into a simplified two-tier structure, calling it a “landmark in India’s indirect tax reforms.”

According to Setty, the new GST structure of 5% and 18% with 40% on sin goods will help create a “clutter-free, next-generation GST that is simpler, more transparent, and citizen-centric.” He emphasized that shifting household goods from higher slabs to the 5% category would directly benefit consumers through lower costs on essentials and higher disposable incomes. “With greater spending power, demand and credit expansion will rise, driving economic growth,” he said.

He noted that the reforms will also provide a boost to the insurance sector, where lower premiums are expected to expand coverage and improve penetration across the country. Additionally, the reduction in GST on mass consumption goods is expected to soften headline CPI, while businesses will benefit from reduced compliance costs and improved competitiveness.

While acknowledging a potential short-term dip in tax revenues, Setty expressed confidence that the gap would be offset through increased consumption and stronger economic activity. “The implications are both immediate and long-term as this initiative consolidates GST into a truly citizen-friendly and growth-oriented GST 2.0,” he said.