GST 2.0

Posted by Kalaiselvi on 2025-10-28 09:23:31 |

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India’s GST 2.0 reform is a major restructuring of the Goods and Services Tax system aimed at simplifying taxation and improving affordability. The new system introduces a two-slab model of 5% and 18%, along with a special 40% rate for luxury and demerit goods. This marks a major shift toward a simpler, fairer, and growth-driven tax regime.

Taxes on essential goods like soaps, toothpaste, and Indian breads are now reduced to 5% or fully exempt, helping families manage their living costs better. Healthcare benefits as well — taxes on essential medicines and life-saving drugs drop from 12% to Nil or 5%, making treatment more affordable.

Middle-class consumers gain relief through lower taxes on two-wheelers, small cars, TVs, air conditioners, and cement. These cuts promote spending and support the automobile, electronics, and construction sectors. In agriculture, GST on farm machinery and irrigation tools is reduced from 12% to 5%, cutting farming costs and boosting productivity.

Luxury and harmful products such as tobacco, pan masala, and aerated drinks now face a 40% GST. This balances revenue while discouraging excess consumption.

Overall, GST 2.0 promotes simplification, affordability, and transparency. It reduces compliance pressure for businesses, prevents disputes, and encourages industrial growth. The reform benefits both consumers and producers while supporting India’s economic progress.

Takeaway;

ITP regularly conducts public events with sponsorships and merchandise to raise awareness about GST 2.0, road safety, and environmental issues, while submitting public petitions to authorities to promote responsible citizenship.