The GST 2.0 reforms, announced in 2025, represent a major overhaul of India’s Goods and Services Tax system. The new structure reduces complexity, brings transparency, and aims to make taxation simpler for both consumers and businesses.
Under the new system:
Essential items like milk, roti, paneer, and medicines are tax-free.
Non-essential items and luxury goods have been consolidated into two tax slabs: 5% and 18%.
These reforms aim to reduce compliance burden, lower the cost of essential goods, and boost consumption in the economy.
Impact on Consumers
Lower Bills on Essentials
Tax-free items mean lower prices for everyday groceries and medicines.
Reduced Cost on Certain Products
Goods like air conditioners, televisions, and electronics see GST reductions from 28% to 18%.
Clarity on Taxation
Consumers now have fewer categories to understand, making bills and receipts more transparent.
Effect on Services
Services such as telecom, hotels, and online platforms fall under the revised slabs, impacting service costs slightly.
Impact on Businesses
Simplified Compliance
Fewer GST slabs reduce paperwork and accounting complexity.
Better Cash Flow
Lower taxes on essentials can increase demand, benefiting retail and FMCG sectors.
Competitive Pricing
Businesses can adjust prices effectively without navigating multiple tax rates.
FAQs
Q1: What are the new GST slabs under GST 2.0?
A1: The new GST structure has two main slabs: 5% and 18%, with essential goods being tax-free.
Q2: Which items are tax-free under GST 2.0?
A2: Essentials like milk, paneer, roti, and certain medicines are completely exempt.
Q3: How will this affect the price of electronics?
A3: Some items like TVs and ACs see GST reduction from 28% to 18%, lowering retail prices.
Q4: Does GST 2.0 affect online services like food delivery or streaming?
A4: Certain services are impacted depending on their classification under the revised slabs.
Q5: When will GST 2.0 take effect?
A5: The new GST reforms are effective from September 22, 2025.
Conclusion
GST 2.0 marks a significant step toward simplifying India’s tax system. By reducing slabs, exempting essentials, and lowering rates on certain products, it benefits both consumers and businesses, while promoting transparency and economic growth. Staying informed about these changes helps in budgeting and business planning.
Published on : 4th September
Published by : SMITA
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