GST 2.0 refers to the major reforms in India's Goods and Services Tax system announced in 2025, effective from September 22, 2025. These changes aim to simplify the tax structure by rationalizing slabs to primarily 0%, 5%, 18%, and 40% for demerit goods. Explore major changes, pros, effective dates, and more below.
GST, or Goods and Services Tax, is an indirect tax levied on the supply of goods and services in India. Introduced on July 1, 2017, it replaced multiple cascading taxes like VAT, excise duty, and service tax, creating a unified tax system. GST is destination-based, meaning it's collected at the point of consumption.
To comply with GST:
The reforms rationalize GST slabs by abolishing 12% and 28% rates, moving to primarily 5% and 18%, with 0% for essentials and 40% for luxury/sin goods. Key shifts:
These changes aim to reduce litigation and simplify classification.
| Category | Old GST Rate | New GST Rate | Impact |
|---|---|---|---|
| Small cars | 28% | 18% | Affordable upgrades in the auto sector |
| Air conditioners, televisions | 28% | 18% | Lower cost for big-ticket electronics |
| Insurance premiums | 18% | 15% or Nil | Reduced financial burden for households |
| Daily-use essentials | 5% | Nil | Basic items may become tax-free |
| FMCG & packaged foods (chips, namkeen, ketchup, pasta, butter, ghee, cheese, juices, milk-based beverages) | 12% or 18% | 5% | Grocery bills set to reduce |
Most rate changes effective from September 22, 2025. Exceptions for tobacco and related products.
Disclaimer IndiaLawActs.in is an independent platform created for educational and informational purposes only. We are not affiliated with, endorsed by, or connected to the Government of India or any official body. The bare acts, laws, and legal texts provided on this website are sourced from public records and government publications that are in the public domain. While we strive to keep the information accurate and up to date, we do not guarantee completeness, accuracy, or reliability. For official and authoritative versions of the law, users should refer to the Government of India Gazette or consult a qualified legal professional.
The following information is sourced from recent GST reforms. This is for educational purposes only; verify with official sources (e.g., GST Council) for legal use. We are not liable for errors or consequences from use.