New Delhi, Sep 22:
India is witnessing a transformative moment in its economic policy as GST 2.0 officially rolls out today, ushering in a new era of simplified taxation with the promise of reduced prices, increased savings, and easier compliance for businesses and consumers alike.
Approved earlier this month by the GST Council, these sweeping changes mark the biggest overhaul of the Goods and Services Tax (GST) system since its inception in 2017. The new framework introduces a streamlined two-tier tax structure and revises rates for over 375 essential and daily-use items, directly touching millions of households across the nation.
Under this revised regime:
- Goods and services will now fall under two main tax slabs – 5% and 18% – replacing the earlier four-tier system of 5%, 12%, 18%, and 28%.
- A special 40% slab will be reserved for ultra-luxury items, sin goods, and other demerit products, ensuring the burden is shared more equitably.
- Everyday essentials like food grains, medicines, dairy products, and household items will stay in the 5% bracket, safeguarding affordability for the common citizen.
- The 12% slab has been eliminated, potentially reducing the cost of several mid-range goods such as coffee, butter, paneer, jams, snacks, ketchup, and dry fruits.
To mark the occasion, Prime Minister Narendra Modi declared the launch of a nationwide “GST Utsav” beginning today, coinciding with the auspicious start of Navratri. “From September 22, people will be able to buy their favourite items at lower prices,” he said. “It’s not just a reform—it’s a festival of savings for every Indian, especially the poor and the rising middle class.”
The Union Finance Ministry officially notified the new CGST rates on September 18, while states are now issuing updated SGST notifications. These combined changes are expected to have immediate impact, bringing relief to households just ahead of the festive season.
But this reform goes beyond savings—it signals a vision for inclusive growth. With the implementation of GST 2.0, the government is aiming to:
- Boost consumption by making goods more affordable.
- Simplify compliance for small businesses and entrepreneurs.
- Ensure a more transparent and citizen-friendly tax structure.
- Empower MSMEs, farmers, women entrepreneurs, and the youth, by lowering barriers to participation in the formal economy.
