Upcoming GST Reforms in India: New Rates, Slabs, and Key Changes in 2025

 

India’s GST 2.0: A Landmark Overhaul Ahead of Diwali 2025

1. Introduction to GST 2.0

India’s Goods and Services Tax (GST), introduced in July 2017, has brought uniformity and efficiency to the country’s indirect tax structure. However, its multiple rate slabs (5%, 12%, 18%, and 28%, along with special levies) have long invited calls for simplification. In mid-2025, Prime Minister Narendra Modi announced a major “next-generation” GST reform—dubbed GST 2.0—promising a streamlined, pro-consumer system by Diwali 2025.

2. Key Changes: Two-Slab System + Sin Tax

• New Two-Slab Tax Structure: The current four-tier rates (5%, 12%, 18%, 28%) will be consolidated into two main slabs:

  • 5% for essentials and merit goods

  • 18% for standard goods and most consumer items.

• Addition of a 40% “Sin Tax” Slab: A new higher slab targeting demerit or luxury items (such as tobacco, alcohol, fast food, luxury cars, and online gaming) is proposed to discourage harmful consumption while generating state revenue.

3. How Product Categories Are Affected

12% → 5%: Almost all items previously taxed at 12%—like dry fruits, juices, and certain processed foods—will see a major drop to 5%.

28% → 18%: Nearly 90% of items classified under 28%—including TVs, ACs, refrigerators, and building materials (e.g., cement)—will shift to 18%. Expected to lead to price drops in home appliances and construction sectors.

Sin Goods → 40%: A separate, stiff 40% slab will apply to luxury and sin goods, reinforcing public health objectives while funding state coffers.

Special Rates Unchanged: Items like jewelry, precious stones, and most essential goods remain unaffected—jewelry stays taxed at 3%, stones at 0.25%, and essentials at 0%.

4. Implementation Timeline

Group of Ministers (GoM) Approval: A government panel has cleared the proposal for a simplified GST slab structure and fast-tracked GST Council deliberations expected in early September 2025.

GST Council Meets Sept 3–4: Final approval is anticipated in the GST Council’s early September meeting. States and industries are pushing for prompt implementation to coincide with the Diwali festival window.

5. Benefits: Consumers, Real Estate, Economy

1. Boost to Household Affordability

Streamlined rates and reduced GST on essentials and appliances aim to put more money in consumers' hands—just in time for festive spending sprees.

2. Real Estate Gets a Break

Lower GST on building materials (like cement) translates to 2–4% lower housing prices in the affordable segment. Developers and buyers alike stand to benefit.

3. Stimulating Consumption & Growth

Lower taxes on vehicles and household items may ignite spending — especially on small cars, which could jump from 28% to 18%, although EVs remain at 5%. However, this may slow EV adoption.

4. Simpler Tax Framework

Fewer slabs mean fewer disputes, better compliance, and streamlined operations for businesses and tax authorities.

6. Risks & Concerns

• State Revenue Concerns
  

  States like Kerala warn the reforms could slash GST income significantly—up to ₹8,000 crore this year alone. Calls for a compensation mechanism reminiscent of GST’s rollout era are mounting.

• Revenue Impact on Center
  

  Projections suggest the GST rationalization might cost the central government ₹85,000 crore annually, marking a substantial fiscal risk.

• Shift in Consumer Behavior
  

  Lower taxes on small ICE vehicles risk undoing EV incentive progress, potentially slowing green mobility momentum.

  Quick Summary Table

  
  

  Element	Current (2025)	GST 2.0 Proposal
  Tax Slabs	5%, 12%, 18%, 28%	5%, 18%, (40% on sin goods)
  Goods Moving to 5%	A few essential items	~99% of current 12% items
  Goods Moving to 18%	TVs, appliances, etc. at 28%	~90% of current 28% items
  Sin Goods Rate	Various including cess	40% flat rate
  Timeline	Multi-year structure	Implementation expected by Diwali 2025
  Risks	Complex compliance	Revenue loss, EV shift, state compensation

  
  
  
  

  7. Conclusion

  The upcoming GST reforms in India for 2025 signal a significant shift toward a more simplified, equitable, and efficient taxation framework. With proposed changes like rationalization of tax slabs, clearer distinction between goods and services, streamlined compliance through e-invoicing, and the anticipated inclusion of petroleum and alcohol under the GST umbrella, the government is taking concrete steps to expand the tax base and reduce ambiguity.

  These reforms are expected to ease the burden on small businesses, enhance the transparency of tax collection, and support the government’s larger vision of a “One Nation, One Tax” regime. As always, any change in taxation affects all sectors — from manufacturers and service providers to end consumers. Thus, it's critical for all stakeholders to stay updated and prepare for a seamless transition.

  
  

Ex‑Twitter CEO Parag Agrawal, Fired by Elon Musk, Resurfaces with AI Startup Parallel Web Systems

In a striking comeback, Parag Agrawal, the former CEO of Twitter, has re-entered the tech world with a bold new venture. Launched in 2023 and now public, Parallel Web Systems Inc. represents Agrawal’s vision for an internet built not just for humans—but for AI.

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A Triumphant Return: From Twitter to Parallel

Parag Agrawal was appointed Twitter CEO in November 2021, succeeding Jack Dorsey. His tenure ended nearly a year later when Elon Musk completed his $44 billion acquisition of Twitter (now rebranded as X), abruptly dismissing Agrawal and other members of the leadership team 

But rather than stepping away, Agrawal pivoted decisively. Friends suggested he take a break, perhaps enjoy "the beach" post-Twitter—but he chose otherwise. By 2023, he was quietly laying the groundwork for something transformative. Now headquartered in Palo Alto with a compact team of around 25, he's leading Parallel Web Systems into the next era of AI innovation.

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Funding and Vision: Building AI’s New Internet Layer

Parallel has ignited early investor enthusiasm, raising $30 million from notable firms including Khosla Ventures, Index Ventures, and First Round Capital 

The aim? To craft infrastructure enabling AI agents to autonomously conduct deep, accurate retrievals and synthesis of web data in real time—far beyond the static responses of search engines or traditional models. By entering “stealth mode” and exposing its foundation, Parallel is clearly playing the long game.

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The Game-Changing Deep Research API

At the heart of Parallel’s offering is its Deep Research API, empowering AI systems to:

• Conduct live research across the open web

• Verify data accuracy and attribution

• Organize insights with highly detailed citations

Remarkably, the platform claims to outperform humans and models like GPT‑5—specifically in rigorous benchmarks for web research tasks.

Its backend comprises eight distinct “research engines”, handling everything from quick retrievals (under a minute) to deep-dive analysis (via the fastest Ultra8x engine).

Used by AI-first companies and large enterprises alike, coding assistants leverage it for debugging, while financial organizations can synthesize and organize market data swiftly and accurately.

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Why Parallel Matters: The Web’s Second User Is AI

Agrawal’s core thesis is simple yet revolutionary: while the web was built for humans, its future primary users will be AI. Current infrastructure—based on ads, paywalls, and click metrics—doesn’t serve machine-driven workflows. Parallel seeks to create a “Programmatic Web” capable of reasoning, computation, and transparent attribution—designed for AI agents, not human clicks.

As Agrawal puts it, the internet is humanity’s memory—and Parallel aims to transform it into AI’s research engine.

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Quick Snapshot: What You Need to Know

Aspect	Details
Founder	Parag Agrawal (ex-Twitter CEO)
Startup	Parallel Web Systems Inc.
Founded	2023
Headquarter	Palo Alto
Team Size	25 members
Flagship Product	Deep Research API
Claim to Fame	Outperforms humans and GPT‑5 in deep web research benchmarks
Funding	$30 million from leading VCs
Vision	Build a web infrastructure optimized for AI agents, not humans
Target Use Cases	Research automation, coding assistants, enterprise data workflows

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The Road Ahead: Challenges & Opportunities

Opportunities:

• The AI boom has heightened demand for AI-native web access and data synthesis.

• Building infrastructure that caters primarily to AI represents a market edge.

• Early traction and prominent backers give Parallel a leg up in the industry.

Challenges:

• Competing with entrenched AI giants like OpenAI and Google demands relentless innovation.

• Verifying data credibility and mitigating web misinformation is a formidable hurdle.

• Scaling a radically different infrastructure requires both technical execution and trust-building.

As analysts note, for Parallel to deliver on its promise, it must maintain accuracy, transparency, and scale—while navigating AI ethics, data governance, and evolving regulation.

Conclusion: Defining a New Chapter for Agrawal

Parag Agrawal’s post‑Twitter chapter is a story of persistence, innovation, and foresight. Rather than fading from the spotlight, he’s redefining it—shifting from social media management to architecting the future of AI-driven web interaction.

With Parallel Web Systems and its Deep Research API, Agrawal is betting not just on technology—but on a new digital era where AI stands as the internet’s primary user. His journey from Twitter’s drama-filled exit to launching a high-stakes AI infrastructure company is a compelling narrative of reinvention.

Only time will tell if Parallel reaches the scale of its ambition. But one thing is clear: Agrawal’s next act is already shaping up to be as influential as his last.

Exploring Vikram Solar IPO & GMP: What You Should Know

1. Introduction to Vikram Solar

Vikram Solar is one of India’s leading solar photovoltaic (PV) module manufacturers, with a strong presence in both domestic and international markets. As of March 31, 2025, the company boasts an operational module manufacturing capacity of 4.5 GW and has ambitions to scale to 15.5 GW by FY26 and 20.5 GW by FY27. It operates advanced facilities in West Bengal and Tamil Nadu and is expanding its footprint based on growing solar energy demand.

2. IPO at a Glance

• Price Band: ₹315 (floor) to ₹332 (cap) per share.

• Total Issue Size: ₹2,079 crore approximately, comprising a fresh issue worth ₹1,500 crore and an Offer For Sale (OFS) of ~1.75 crore shares valued at ₹579.4 crore.

• Subscription Window: Opens on August 19, 2025, and closes on August 21, 2025.

• Allotment & Listing: Allotment is expected by August 22, with listing projected for August 26, 2025.

The IPO is being managed by prominent lead managers such as JM Financial, UBS Securities, Equirus Capital, Nuvama, and PhillipCapital, with MUFG In time India as the registrar.

3. Understanding Grey Market Premium (GMP)

The Grey Market Premium (GMP) reflects investor sentiment before a company officially lists. It indicates the premium (or discount) at which IPO shares trade in unofficial, over-the-counter markets.

As of mid‑August 2025, Vikram Solar’s IPO was commanding a substantial GMP:

• Moneycontrol reports a GMP of over 19%.

• India Today puts the GMP at approximately ₹66, translating to ~19.88% premium — suggesting a potential listing price of around ₹398.

• Mint indicates a GMP of ₹70, implying a potential listing price of about ₹402 — about 21.1% above the upper price band.

• Economic Times (ETMarkets) cites a GMP range of ₹65–70, or a 19.6% premium.

Though slight variations exist across sources, all consistently point to a ~20% expected gain at listing — a strong sign of bullish market sentiment.

4. Why is the GMP So High?

Several factors contribute to this elevated GMP:

Strong Industry Tailwinds

India’s renewable energy push is in full swing, and companies like Vikram Solar stand to benefit from both domestic demand and global export potential.

Growth Ambitions & Capacity Expansion

The company’s aggressive expansion plans — scaling manufacturing capacity — align with projected solar deployment strategies in India.

Financial Fundamentals

FY 2024–25 financials show revenue of ₹3,459.5 crore and net profit of ₹139.8 crore, marking significant growth from the previous year. These figures add confidence to investor expectations.

Scarcity & Demand Dynamics

High demand for IPO shares, particularly in the grey market, can inflate GMP, especially for first-time issuers with strong business models.

5. What GMP Means for Investors

For Retail Investors:

• A high GMP indicates strong listing gains, but it's not guaranteed—expect volatility.

• GMP can change rapidly; it’s vital to monitor it close to IPO closing.

• GMP doesn’t reflect long-term fundamentals; use it as a short-term indicator only.

For Institutional Investors:

• GMP can be a sentiment gauge but should be balanced against intrinsic valuation and strategic fit.

• High GMP may raise expectations and demand strong business rationale.

Important Caveat:

GMP is informal and unregulated. While reflective of sentiment, it can be driven by speculation, making it risky to rely on solely.

6. Comparing GMP with Peers

Vikram Solar’s GMP (~20%) stands out even among other IPOs launching the same week:

• Patel Retail: ~13.3% GMP.

• Shreeji Shipping Global: ~11–12% GMP.

• Gem Aromatics and Mangal Electrical: No GMP reported yet.

Vikram Solar thus appears to be the most anticipated among its peers.

7. Risks and Considerations

Market Volatility: Listing-day dynamics can overturn GMP-based expectations.

Valuation Concerns: At upper price band, P/E stands between 68–72× FY25 EPS — significantly above sector average of - 44× 

Execution Risk: Expansion plans hinge on execution; economic or supply-chain disruptions can impact outcomes.

Regulatory & Market Sentiment: Policy changes or broader market shifts can alter listing trajectory.

8. Investor Checklist Before Applying

Factor	What to Check
Business Model	Market position, capacity, scope, innovation
Financial Strength	Growth trends, profit margins, financial health
Valuation	P/E premium vs. peers, long-term justifiability
GMP Trend	Direction and volatility in pre-listing period
IPO Mechanics	Lot size, reservation categories, timing implications
Exit Strategy	Short-term gain vs. long-term hold rationale

9. Conclusion

The Vikram Solar IPO, opening August 19–21, 2025, comes with a price band of ₹315–332 and strong underlying business fundamentals and capacity expansion plans.

With a GMP hovering around ₹65–70, signaling ~20% expected listing gains, investor expectation is palpable. However, GMP is speculative and should only provide a sentiment snapshot—not drive decisions alone.

Investors should balance this optimism with the company’s metrics, valuation, and individual risk appetite. Whether you’re aiming for quick listing gains or long-term growth, this IPO demands a thoughtful, informed approach.