https://sputniknews.in/20250913/gst-20-landmark-reform-set-to-reshape-indias-tax-landscape-9755136.html
GST 2.0: Landmark Reform Set to Reshape India’s Tax Landscape
GST 2.0: Landmark Reform Set to Reshape India’s Tax Landscape
Sputnik India
India is entering a new phase of tax reform. The Goods and Services Tax (GST) 2.0, approved by the GST Council in early September and set to take effect on 22... 13.09.2025, Sputnik India
2025-09-13T16:01+0530
2025-09-13T16:01+0530
2025-09-13T16:01+0530
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The reform introduces three broad tax slabs — 5% on essentials, 18% as the standard rate for most goods and services, and 40% on luxury or sin items. Several exemptions have been expanded, with life and health insurance now fully tax-free, common food products like UHT milk and paneer moved to the nil GST bracket, and 33 life-saving drugs and medical devices either exempted or shifted to lower rates.Households will feel relief as everyday purchases become cheaper. Items such as small cars, televisions, air conditioners, and cement are moving from the 28% slab to 18%. Farmers and artisans also benefit, with concessions for farm machinery and handicrafts. Businesses gain from faster refunds for exporters, simpler registration for smaller firms, and an upgraded e-invoicing system.Why It MattersThe reforms are designed to lighten the cost burden on the middle and lower income groups, giving citizens more disposable income. Cheaper goods and services are expected to fuel consumption, particularly during the festive season. MSMEs — the backbone of India’s economy — gain from reduced compliance hurdles and quicker refunds, helping them reinvest and expand.Equally important is fairness. Luxury and sin goods will carry higher taxes, while essentials become more affordable, making the system more equitable. Businesses also see greater predictability and stability, which helps long-term planning and investment.Early SignalsReactions have been largely positive. Industry bodies have praised GST 2.0 as a reform in favor of the common man. Consumer goods companies have already announced price cuts on soaps, shampoos, and packaged products. The Finance Ministry acknowledges a possible short-term dip in revenue, but argues that stronger consumption and growth will close the gap.The Road AheadGST 2.0 represents more than just another adjustment — it is an effort to redefine India’s tax landscape. If implemented effectively, it could balance affordability with fiscal stability, ease pressure on citizens, and make compliance simpler for businesses. By doing so, it has the potential to accelerate growth and bring inclusivity into the heart of India’s tax framework.
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GST 2.0: Landmark Reform Set to Reshape India’s Tax Landscape
India is entering a new phase of tax reform. The Goods and Services Tax (GST) 2.0, approved by the GST Council in early September and set to take effect on 22 September 2025, aims to simplify the tax structure, reduce costs for households, and stimulate growth.
The reform introduces three broad tax slabs — 5% on essentials, 18% as the standard rate for most goods and services, and 40% on luxury or sin items. Several exemptions have been expanded, with life and health insurance now fully tax-free, common food products like UHT milk and paneer moved to the nil GST bracket, and 33 life-saving drugs and medical devices either exempted or shifted to lower rates.
Households will feel relief as everyday purchases become cheaper. Items such as small cars, televisions, air conditioners, and cement are moving from the 28% slab to 18%. Farmers and artisans also benefit, with concessions for farm machinery and handicrafts. Businesses gain from faster refunds for exporters, simpler registration for smaller firms, and an upgraded e-invoicing system.
The reforms are designed to lighten the cost burden on the middle and lower income groups, giving citizens more disposable income. Cheaper goods and services are expected to fuel consumption, particularly during the festive season. MSMEs — the backbone of India’s economy — gain from reduced compliance hurdles and quicker refunds, helping them reinvest and expand.
Equally important is fairness. Luxury and sin goods will carry higher taxes, while essentials become more affordable, making the system more equitable. Businesses also see greater predictability and stability, which helps long-term planning and investment.
Reactions have been largely positive. Industry bodies have praised GST 2.0 as a reform in favor of the common man. Consumer goods companies have already announced price cuts on soaps, shampoos, and packaged products. The Finance Ministry acknowledges a possible short-term dip in revenue, but argues that stronger consumption and growth will close the gap.
GST 2.0 represents more than just another adjustment — it is an effort to redefine India’s tax landscape. If implemented effectively, it could balance affordability with fiscal stability, ease pressure on citizens, and make compliance simpler for businesses. By doing so, it has the potential to accelerate growth and bring inclusivity into the heart of India’s tax framework.
