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India’s plan to overhaul its goods and services tax (GST) regime is being billed as the most sweeping reform since the levy was introduced in 2017. And for RC Bhargava, chairman of the country’s largest carmaker Maruti Suzuki, the proposed changes could be transformative.Speaking to Reuters on Monday, Bhargava called the move a “huge reform” and said it would sharpen the competitiveness of Indian products. “The restructuring will increase competitiveness of Indian products and the opening of trade borders will bring in the necessary competition, which will help expand the market and benefit customers,” he said.At the heart of the government’s plan is a sharp reduction in GST rates on small cars and insurance premiums. According to a people in the know, the tax on small petrol and diesel cars could be cut to 18% from the current 28%. Insurance premiums for health and life policies may also see a steep drop, with rates potentially falling to 5% or even zero from 18%.The changes are part of a wider push by Prime Minister Narendra Modi’s administration to simplify the GST structure. Over the weekend, the government unveiled plans to collapse the multiple tax slabs into just two: 5% and 18%. The 28% slab would be scrapped, though so-called “sin goods” such as tobacco and luxury items would attract a new 40% levy.Markets cheered the announcement. The benchmark Nifty index gained 1.3% on Monday, on track for its best session in three months. Auto stocks led the rally, with analysts, as citied by Reuters, pointing out that carmakers stand to gain most if the proposals go through. “The tax cuts would enhance affordability, boost consumption, and make essential and aspirational goods more accessible to a wider population,” Mahesh Nandurkar, equity analyst at Jefferies, wrote in a note. “Maruti (Suzuki) should be the biggest beneficiary of this potential cut.”The reform is expected to bring down product prices from October, provided the GST Council, chaired by the finance minister and including state representatives, gives its approval at its next meeting.With inputs from Reuters