GST 2.0 has arrived, bringing India a simpler, fairer, and more transparent tax system. The key change is a move from multiple tax slabs to just two: 5% for essentials and 18% for most goods and services. The outdated 28% slab is gone, making everyday items like cars, appliances, TVs, and air conditioners more affordable.
The new system is designed to reduce the burden on businesses, especially MSMEs, by offering faster refunds and one-click registration. Issues like inverted duty structures have been resolved, ensuring smoother input tax credit claims.
Since its launch in 2017, GST has successfully expanded the tax base from 65 lakh to over 1.51 crore taxpayers. Monthly revenues are now stable, averaging ₹1.6–1.7 lakh crore, showing a mature and stable system.
For consumers, this means lower prices on essentials like groceries and medicines. For businesses, it creates a more predictable and globally competitive environment. GST 2.0 isn’t just a reform—it’s a smarter, simpler tax system built to drive growth.
Frequently Asked Questions (FAQs) about GST 2.0
Q: Why another reform? Didn’t the GST fix everything?
A: GST 1.0 was a crucial first step that unified India’s tax system. GST 2.0 is the next evolution, building on that foundation to make the system cleaner, easier, and more transparent by reducing tax slabs to just two.
Q: What happened to the other tax slabs?
A: The old 12% bracket has been smartly merged. Most items have moved to the 5% essentials slab, leading to lower prices on food and medicines. Most items from the 28% slab—like cars and appliances—have dropped to 18%, making them more affordable.
Q: Will small businesses still struggle with compliance?
A: No. With fewer slabs, the system is clearer. Features like instant refunds and one-click registration are designed to make compliance faster and lighter for MSMEs.
Q: Will states lose revenue with the lower tax rates?
A: No. The 12% slab contributed very little revenue, and shifting items from 28% to 18% is expected to boost demand. This will lead to predictable, stable revenues for states while giving consumers lower prices.
Q: How does this affect my everyday expenses?
A: Your daily expenses will likely get cheaper. Groceries, medicines, and other essentials will remain at 0–5%, while many household appliances and other goods will drop to the 18% slab, resulting in lower prices.