🇮🇳 GST 2.0: India’s boldest tax reset yet

Good morning! After the Independence Day break 🇮🇳 and a much-needed long weekend, it’s back to the grind. While you were recharging, policymakers, startups, and global leaders kept the headlines hot.

Here’s your Monday pour.

🫖 Chai Shots

• 📊 Biggest GST reset since 2017 incoming: A two-slab system, rationalisation of rates, and a revamp of dispute handling could be announced before Diwali. The GST Group of Ministers (GoM) chaired by Bihar’s Deputy CM Samrat Choudhary meets Aug 20–21 to review the blueprint. More in the Big Brew 👇

• 🌍 US-India trade talks postponed: A US delegation scheduled to visit New Delhi on Aug 25–29 has called off its trip amid tariff tensions. Trump has imposed cumulative 50% duties on Indian exports citing Russian oil and defense purchases, sparking sharp pushback from New Delhi.

• ⌚ Apple Watch gets blood oxygen feature back: After a US import ban over patents, Apple has reintroduced the feature for Series 9, 10, and Ultra 2 models via iOS 18.6.1 and watchOS 11.6.1. Now, the watch collects oxygen data but processing happens on the paired iPhone, with results in the Health app.

• 🛵 Rapido challenges Swiggy & Zomato: Bike-taxi giant Rapido has entered food delivery with “Ownly,” promising prices ~15% lower by charging restaurants commissions of only 8–15%, compared to 30% on rivals. Currently in beta, it’s live in Bengaluru’s BTM, Koramangala, Tavarekere, and HSR.

📈 Market Masala

• 📊 Indices bounce back: On Thursday, Sensex closed at 80,598 (+57 points) and Nifty at 24,631 (+12 points), ending a six-week losing streak with weekly gains of ~1%. IT and pharma led gains on softer US inflation data, though metals and energy slipped on oversupply worries.

• 🚗 Small cars may get tax break with GST revamp: The Centre is considering lowering GST on cars with engines under 1200cc to 18%, from the steep 28% plus cess. This change would also scrap the confusing SUV definition that factors in ground clearance and length. For budget-conscious buyers, this could revive demand in the hatchback and compact car segments.

• 🛑 No GST relief for sin goods: The Centre confirmed that products like cigarettes, chewing tobacco, and gutka will remain under punishing tax slabs. Current cess rates are as steep as 204% for gutka and 160% for chewing tobacco, keeping prices sky-high.

• 💻 Samsung makes laptops in India: Samsung has begun manufacturing laptops at its Greater Noida facility, expanding beyond phones and wearables. The company holds a 15% share in India’s laptop market and plans to add more product categories to its India-made portfolio.

• 🍎 Foxconn starts iPhone 17 production in Bengaluru: Foxconn has kicked off small-scale iPhone 17 production at its new ₹25,000-crore Bengaluru factory—its second-largest outside China. Apple plans to ramp up Indian iPhone output to 60M units in 2025, up from 35–40M last year. Already, 60% more iPhones worth $22B were assembled in India in FY25.

🌍 Global Masala

• 🌍 Global markets week ahead: Defense and energy stocks remain in focus as Trump pushes Kyiv towards a Russia-leaning peace deal. Investors are betting on Arctic oil/gas exploration and higher European defense spending. The euro is up 13% this year while Brent crude has dropped to ~$66.

• 📲 ChatGPT rules the app world: OpenAI’s ChatGPT mobile app has crossed $2 billion in consumer spending since its 2023 launch, averaging $193M a month this year. With nearly 690M installs, India is the top market for downloads (13.7%). By comparison, Elon Musk’s Grok has only 39.5M downloads.

🍵 The Big Brew: GST 2.0 — India’s Boldest Tax Reset Since 2017

India is gearing up for its most ambitious GST overhaul in years—promising simpler rates, better compliance, and fairer dispute handling. Here’s what’s brewing:

The Centre has circulated a draft blueprint for GST 2.0, targeting rollout before Diwali. The plan rests on three pillars: structural reforms, rate rationalisation, and ease of living.

• ⚖️ Two-slab system incoming: From the current multiple rates, the proposal moves to just two main slabs—making compliance smoother and rates more predictable. Essentials like daily-use goods may get cheaper, while aspirational or luxury items could move higher.

• 🚗 Small car relief: Vehicles under 1200cc may shift to 18% GST from the steep 28% + cess, simplifying classifications and scrapping the confusing SUV definition. This could boost demand in entry-level auto segments.

• 🧵 Fabric boost: Man-made fabrics, long taxed at 12%, may drop to 5% to align with natural fabrics, a big relief for MSMEs in the synthetic textiles sector.

• 🚫 Sin goods excluded: Cigarettes, gutka, and tobacco products remain outside the new framework, continuing to face punishing levies well above 40%.

But reforms go beyond rates:

• 📝 Dispute resolution overhaul: GST probes today often trigger automatic notices, leading to frozen accounts and endless litigation. Experts argue for a national e-platform to track cases and prevent harassment, plus joint audits to avoid multiple authority overlaps.

• 👨‍💼 Compliance rethink: Crackdowns should target fraudsters, not MSMEs making filing errors. Clearer advisories and defined steps for claiming Input Tax Credit could cut unnecessary disputes.

• 🧑‍⚖️ Fairness & training: Former CBIC chief warns tax officers must be incentivized to resolve disputes constructively, not mechanically issue penalties.

What does this mean?
If implemented, GST 2.0 could finally make the “Good & Simple Tax” live up to its name—lowering consumer prices on essentials, reviving sectors like textiles and autos, and reducing compliance headaches for businesses. But execution will be key: without disciplined officers and smarter systems, India risks swapping one maze of rules for another.

🚀 Startup Scoop

• 📦 Swiggy hikes fees amid losses: Swiggy increased its platform fee to ₹14 (inclusive of GST) in high-demand areas, up from ₹12. The tweak comes as its Q1 losses doubled to ₹1,197 crore, driven by Instamart investments, even though revenue jumped 54% to ₹4,961 crore.

• 🧑‍💻 Darwinbox bags $40M: HR-tech unicorn Darwinbox raised $40M from Teachers’ Venture Growth to accelerate its US expansion and AI-first HCM innovation. It already powers HR for over 1,000 enterprises across 130 countries, including Adidas, Starbucks, and Zara.

• 🦷 makeO goes offline: Toothsi’s parent makeO acquired Andhra-based Apple Dental for ₹11 crore in a cash-and-stock deal. Apple Dental runs 20 clinics in Andhra Pradesh and Telangana. The move expands makeO’s offline presence in Tier II & III towns.

• 👗 Peak XV’s first quick-commerce bet: Formerly Sequoia India, Peak XV Partners is investing $5M in fashion delivery startup Zilo, which promises 60-minute delivery of top brands like Puma, Rare Rabbit, and United Colors of Benetton. Zilo plans to expand beyond Mumbai this year with 250+ brands.

🤓 Chai Break Trivia

Did you know 🍕: In 2001, Pizza Hut delivered a pizza to space? It was sent to the International Space Station, making it the first pizza ever delivered off Earth. The bill: $1 million for delivery! 🚀

🔮 What’s Brewing Next

• 📢 GST panel meets Aug 20–21 to finalise rate reforms ahead of the September GST Council session.

And that’s your first sip after the long weekend! 🌞 While you were enjoying tricolour parades and extra chai refills, the world kept spinning—from GST reforms brewing at home to trade tensions abroad. Strap in: the week ahead is packed, and we’ll keep your cup filled with fresh takes.