The reduction in Goods and Services Tax rates in India in 2025 has turned out to be a major fiscal intervention that will help stimulate consumer demand and improve market liquidity to enhance profitability in key sectors. This analytical study looks at immediate and short-run market behavior subsequent to the reduction in GST slabs, focusing on immediate changes in pricing structures, consumer spending patterns, and profit margins. The reform targets basic and semi-essential commodities, durable goods, and services with an aim to lessen the tax burdens, widen consumption capacity, and make the retail ecosystem strong. Findings indicate that lower GST rates reduce the overall cost of many consumer products, which, in turn, is leading to higher purchase frequency and discretionary spending. This reduction has been particularly influential in price-elastic sectors such as FMCG, electronics, automobiles, and hospitality, where marginal tax changes alter demand curves. For retailers, this growth in footfall and online orders is attributed to perceived affordability and also to promotional bundling strategies. E-commerce platforms further amplify demand through discount synergies enabled by lower tax outlays. The reform enhances profitability on the business side by reducing indirect tax liabilities, improving efficiency in input tax credit, and enabling competitive pricing. SMEs, in particular, benefit from a reduction in pressure on working capital and greater flexibility in tax compliance. However, the transitional cost of compliance, the adjustment in billing, and the temporary recalibration of systems persist. Large corporations enjoy scale advantages while micro-enterprises are subject to delays during initial adaptation. Demand spurts have been reported to be better in urban markets in the region. However, rural consumption is likely to eventually catch up once distribution systems settle down. In fact, the study indicates positive sentiment among consumers, driven by expectations of being able to afford them over a longer period. Policymakers also expect that the revenue shortfall due to price cuts will be made up by more volume-based taxation of consumption. Overall, the rate reduction in GST in 2025 is seen to have promising positive impacts both on consumer behavior and profitability. Further monitoring is required in assessing inflationary pressures, sustainability of tax revenues, and sector-wise disparities. The study concludes that proactive policy adjustments and digital compliance systems will be crucial for maximizing long-term economic gains.