The headline equity benchmarks traded with decent gains in morning trade after the government cut taxes on several goods as part of a major GST overhaul. The move aims to boost consumer spending ahead of the festive season and ease the impact of high U.S. tariffs, among other factors.
The Nifty traded near the 24,850 mark. Auto stocks extended their gains for the second consecutive trading session.
At 10:30 ST, the barometer index, the S&P BSE Sensex, rallied 453.57 points or 0.57% to 81,035.83. The Nifty 50 index added 135.80 points or 0.55% to 24,851.25.
In the broader market, the S&P BSE Mid-Cap index rose 0.26% and the S&P BSE Small-Cap index added 0.23%.
The market breadth was strong. On the BSE, 2,315 shares rose and 1,403 shares fell. A total of 255 shares were unchanged.
GST Reforms:
The GST Council approved the significant rate cuts on several essential items. Effective from September 22nd, the new rates aim to boost consumption by shifting to a two-slab structure of 5% and 18%, abolishing the 12% and 28% rates. A special 40% GST slab has been introduced for super luxury and sin goods.
In a major relief to the automobile and two-wheeler sector, GST on small cars and motorcycles with engine capacity up to 350cc has been reduced from 28% to 18%, a move aimed at boosting demand in the mass mobility segment. Additionally, parts and accessories of motorcycles up to 350cc will now attract 18% GST instead of 28%.
On the other hand, the levy on premium motorcycles exceeding 350cc has been sharply raised from 28% to 40%, making high-end bikes costlier.
The GST Council exempted individual life and health insurance policies from the 18% Goods and Services Tax (GST).
Several fast-moving consumer goods (FMCG) currently taxed at 12% or 18% will now fall under the 5% bracket. Further, GST on tractors (except road tractors for semi-trailers above 1800cc) has been redcued to 5% from 12%. For road tractors with engines above 1800cc, the tax was lowered to 18% from 28%. Additionally, GST on tractor tyres and parts was slashed from 18% to 5%.
In education segment, the council reduced GST on pencils, crayons, pastels, drawing charcoal, chalk sticks, and tailor’s chalk from 12% to nil. Exercise books, graph books, laboratory notebooks, and notebooks too have been exempted from GST, compared with 12% earlier. Additionally, boxes, pouches, wallets, and writing compendiums of paper or paperboard containing assorted stationery will now attract 5% GST instead of 12%.
Buzzing Index:
The Nifty Auto index rose 1.94% to 26,275.25. The index added 2.69% in the two trading session.
Mahindra & Mahindra (up 6.38%), Eicher Motors (up 2.93%), TVS Motor Company (up 1.81%), Samvardhana Motherson International (up 1.09%) and Balkrishna Industries (up 1.27%), Tata Motors (up 1.21%), Bajaj Auto (up 1.61%), Hero MotoCorp (up 1.36%), MRF (up 1.05%) and Bharat Forge (up 0.89%) added.
Stocks in Spotlight:
Bharat Heavy Electricals (BHEL) rose 0.46%. The company said it has accepted a letter of intent (LoI) worth about Rs 2,600 crore from MB Power (Madhya Pradesh) for the supply of key equipment for its 1x800 MW Anuppur thermal power project in Madhya Pradesh.
Angel One rose 0.91%. The firm announced that its client base jumped 26% to 33.57 million in August 2025, compared with 26.65 million in August 2024.