Welcome to yet another edition, chief!

In today’s edition — Everyone’s talking about significant price cuts after GST 2.0, but that’s just one part of the story. The GST revision was supposed to make everything black and white. But it still has several grey areas, which may not be good for businesses. For example, when the lifeline of central cess ends in March 2026, states could find themselves in a bit of financial stress, leading to a reduction in budgets and perhaps a delay in payments to companies working on government projects.

Slabs Simplified, Complexities Intact

Vishwas Ved

It’s been about 10 days since the big-bang GST 2.0 announcements came. We’ve all seen the headlines by now — shampoos and biscuits are cheaper, cement costs less, insurance premiums are more affordable, and cars and bikes now have attractive price tags. 

Audi says you save over ₹7.8 lakh, Hyundai has taken more than ₹70,000 off the Creta, and other automakers like Kia and Yezdi have joined in too. 

This reform has instantly provided relief to everyone’s pocket, be it everyday bills or discretionary purchases. 

But for business leaders, that’s not the whole story. The bigger question is whether GST has actually become simpler, or whether we’ve just traded one set of complications for another. 

Just a couple of days before the big GST announcements came, Prof. Nilanjan Banik’s paper “GST 2.0 – Will It Deliver the Big Leap?”, put out by Think Change Forum, had flagged exactly this risk: don’t get too carried away with slab cuts, the devil is in the design.

The ‘Cess’pool Stays

Let’s start with something that hasn’t been in the headlines much. The whole urgency around this GST revamp comes from the fact that the compensation cess — the extra levy that props up state finances — is levied only up to March 31, 2026. That’s just seven months away. 

Once it’s gone, states lose a steady lifeline from the Centre. As the report notes, this expiry “underscores the fragility of state finances”. If no new system is in place, state budgets will feel the pressure, and when it happens, contractors, suppliers, and project partners are the first to feel the pain. 

For anyone doing business with state governments — infra companies, cement makers, EPC firms — that shift could result in delayed payments and tighter cash flows. It’s not hard to guess how that would appear on their balance sheets. 

Third Slab with a Mask

Officially, India now has only two slabs: 5% and 18%. But then there’s the special 40% rate on sin and luxury goods — tobacco, pan masala, aerated drinks, big bikes, SUVs. 

Sounds pretty clear, but it’s basically a third slab wearing a mask. Banik, professor at Mahindra University, called this out in his paper, and he wasn’t wrong. 

The problem with putting such different industries into one big bucket is that it opens the door to interpretations over what belongs there. At the same time, it also leaves ample scope for under-invoicing and grey markets. 

And who knows there could even be a wild-card entry of an article or service in this segment. 

A Missed Opportunity

Another change Banik recommended was moving to specific duties — a flat tax per unit, like per cigarette stick or per litre of cola. 

Hypothetically speaking, a flat tax of ₹2 per cigarette stick, or ₹10 per litre of soft drink. In such a system, the tax amount stays the same no matter how much the product costs.

Instead, the Council chose to continue with the percentage rates. It means that for sectors caught in the 40% bracket — tobacco, liquor, sugary drinks, and luxury vehicles — the problems stay, and they are left with the same loopholes: under-invoicing, disputes over valuation, and compliance battles.

In short, Prof Banik’s point was that India missed a chance to fix a structural problem. Moving to specific duties could have stopped tax evasion and reduced disputes. With only two percentage rates, GST 2.0 may look simpler on paper but doesn’t remove the everyday battles for sectors in that high-tax bracket.

Final Words

As of now, everyone seems to be happy with the GST move. Consumers are getting lower prices, FMCG companies are hopeful of a jump in demand, and automakers have already reprinted their rate cards. That’s the easy part.

The harder part is still ahead. How will states cope once the cess goes away in 2026? Will the 40% slab then slowly expand into a third rate to compensate for the loss of revenue? 

GST 2.0 is being sold as simplification, and to be fair, some of it is. But the story does not end with two slabs and a bunch of discounts. 

We will need to see whether the new system continues to remain predictable in the years to come. Right now, that’s still an open question..

9,000

That’s the number of jobs Novo Nordisk, the maker of blockbuster weight-loss drug Wegovy, wants to cut in a bid to reignite growth and fend off intense competition from US rival Eli Lilly, and a wave of compounded copycat drugs. The restructuring, expected to save 8 billion Danish crowns ($1.25 billion) annually, comes as Novo Nordisk faces slowing momentum in its once-booming obesity and diabetes franchises. The Danish company also issued its third profit warning this year, citing 9 billion crowns in one-off costs tied to the overhaul.

—Poland is closest to open conflict since World War II.  Poland shot down drones in its airspace on Wednesday with the backing of military aircraft from its NATO allies, the first time a member of the Western military alliance is known to have fired shots during Russia's war in Ukraine. Polish Prime Minister Donald Tusk told parliament it was "the closest we have been to open conflict since World War Two", although he also said he had "no reason to believe we're on the brink of war". 

—Annual hiring data in US was overstated by 911,000. US employers are adding far fewer jobs than initially tallied, in the latest sign that the labor market may be weaker than expected, according to a report from the Labor Department this week. The report from the Bureau of Labor Statistics shows hiring for the 12 months ending in March was overstated by an estimated 911,000 jobs. It was the largest such preliminary revision on record, going back to 2000.The revision comes at a time when President Trump is politicizing the BLS and casting doubt on its data, as part of his wider efforts to exert more control over all aspects of the US government.

—Yvonne McGill to step down as Dell CFO. Dell Technologies has announced that CFO Yvonne McGill will step down after serving two years in the position. The company has appointed Senior Vice President David Kennedy as interim CFO.David Kennedy has been with the PC maker for 27 years. McGill will serve as an adviser through October 31, the company reportedly said. "McGill's decision to resign her position is not the result of any disagreements with the company on any matter relating to its financial statements, internal control over financial reporting, operations, policies or practices," Dell was quoted as saying by media reports.

—Huhtamaki India CFO Jagdish Agarwal resigns. Huhtamaki India announced the resignation of Jagdish Agarwal from the position of executive director & CFO of the company. Agarwal has stepped down to pursue professional opportunities outside the company. His last working day with Huhtamaki India will be December 1, 2025. Huhtamaki India is India's leading manufacturer and supplier of sustainable, flexible, and innovative solutions in packaging and labelling products.

—USFDA approves J&J's bladder cancer treatment. The US Food and Drug Administration has approved Johnson & Johnson's drug delivery system for a type of bladder cancer, offering a potential surgery-free option for patients. The drug release system, branded as Inlexzo, was approved for patients with a type of high-risk non-muscle invasive bladder cancer who did not respond to treatment with Bacillus Calmette-Guerin therapy, the current standard-of-care, and are ineligible for, or refuse to undergo bladder removal surgery.

ICYMI | CFOs: The New Optimus Prime

Missed last week's update? Today’s CFOs are constantly stepping into new roles and donning new hats — much like Optimus Prime, the Transformer who changes shapes to save the day. The finance chiefs are no longer only numbers guys. They manage risks, fix crises, and reinvent themselves as new assets to ensure businesses are steady, growing, and well-prepared for whatever comes next.

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