Startup Policy Forum Hails GST Reform as Game-Changer for Startups

When India rolled out the Goods and Services Tax (GST) back in 2017, it was hailed as one of the biggest tax reforms in independent India. But as startups and small businesses soon discovered, navigating multiple GST slabs, endless compliance checks, and complex paperwork often slowed down growth instead of accelerating it.

This week, the government announced a landmark move: rationalising the GST structure from four different slabs into a simplified two-rate system. And for India’s young entrepreneurs, it feels like a long-awaited breather.

The Startup Policy Forum (SPF), an industry body representing some of the country’s most influential startups, has called the reform a “game-changer” for innovation and business growth. According to them, this is more than just a tax decision—it’s a signal of clarity, stability, and trust for startups, MSMEs, and investors alike.

A Step Towards “Simple Tax”

Welcoming the move, Shweta Rajpal Kohli, President and CEO of Startup Policy Forum, described the new framework as a “Simple Tax” regime.

“This ‘Simple Tax’ regime will provide clarity and predictability for businesses – cutting red tape and easing compliance for startups and MSMEs,” Kohli said in her statement.

For years, startups have struggled with compliance-heavy structures. The shift to a simpler system, industry leaders believe, will not only reduce tax-related anxiety but also free up founders and teams to focus on what they do best—innovating and building.

Boost to Clean Mobility and Green Tech

One of the most celebrated aspects of the reform is the decision to keep electric vehicles (EVs) under the concessional 5% slab. Kohli praised this as a “clear boost” to India’s clean mobility mission.

“This sends a strong signal of policy certainty for innovators and investors across the mobility and green technology spectrum,” she noted.

For a sector that has been attracting billions in investment and attention, this reassurance from policymakers strengthens the long-term outlook for EVs and renewable energy startups.

Benefits Across Sectors: From Healthcare to Manufacturing

The reform goes beyond mobility. Rate cuts on auto parts, small cars, renewable energy devices, medical supplies, and even life-saving drugs are expected to trigger a ripple effect across industries.

For healthcare, this could mean more affordable access to critical drugs and medical devices. For manufacturing, reduced costs on auto parts and renewable energy equipment could spur both production and adoption. For startups working in sustainability, climate tech, or healthcare innovation, this translates into better margins, lower costs, and greater room to scale.

“This reform not only lightens the tax burden,” Kohli said, “but also puts ‘fuel in the tank’ for startups driving innovation, jobs, and India’s journey towards Viksit Bharat @ 2047.”

Why It Matters for Startups

For India’s startup ecosystem, policy predictability often matters just as much as funding. The GST overhaul signals that the government is listening to industry concerns. Simplified taxation ensures that founders aren’t spending precious time on compliance, paperwork, and disputes but instead channeling their energy into building products and creating jobs.

SPF believes this will add momentum to India’s ambition of becoming a global innovation hub. With reduced friction in taxation, young companies can experiment more confidently, investors can plan more long-term, and the ecosystem can expand at scale.

The Startup Policy Forum itself represents the collective voice of India’s most successful new-age companies. With over 50 leading startups as members—spanning fintech, consumer tech, manufacturing, deeptech, and AI—the forum carries a combined valuation of more than $80 billion.

Some of its member companies include names that have become household brands and unicorns: CRED, OYO, Physics Wallah, ixigo, Cars24, Mobikwik, BharatPe, Cardekho, Groww, Zerodha, Swiggy, Razorpay, Dream11, Acko, Pine Labs, Invideo, and Digantara.

Founded and led by Shweta Rajpal Kohli, a seasoned public policy and media professional, the SPF works at the intersection of policy advocacy, community building, and global positioning. Its mission is not just to act as a lobby group but to shape the narrative of Indian startups as drivers of innovation, employment, and national growth.

What Next for Startups?

The GST reform marks an important milestone in India’s economic journey. For startups, it removes some of the everyday hurdles that often stand between an idea and its full potential. For policymakers, it reflects a conscious shift towards making India’s regulatory environment more startup-friendly.

As India looks ahead to its Viksit Bharat 2047 vision, this simplification could be one of those foundational steps that make the difference between incremental progress and exponential growth.

And as Kohli aptly put it, this reform isn’t just about tax—it’s about fueling India’s innovation engine.