Goods and Services Tax 2.0

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Goods and Services Tax 2.0 (India)
GST 2.0 India.png
Agency overview
Formed22 September 2025 (2025-09-22)
Jurisdiction Government of India
Headquarters New Delhi, India
Minister responsible
Deputy Minister responsible
Parent agency Ministry of Finance Government of India
Website http://www.gst.gov.in
Map
India-map-en.svg
All states of New GST 2.0

Goods and Services Tax 2.0, also known as GST 2.0 is a upgraded version of the original Indian GST system, officially launched in 22 September 2025 to streamline indirect taxation across the country. [1] [2] The reform was introduced to simplify the tax structure, reduce compliance burdens for businesses, and make taxation more transparent for consumers. [3] [4]

Contents

The initiative was led by the Ministry of Finance, aiming to modernize the tax administration system using digital tools and data-driven monitoring. [5] GST 2.0 maintained the core principles of a unified tax on goods and services while revising tax rates, removing unnecessary exemptions, and ensuring smoother inter-state trade. [6] [7]

The profile of GST 2.0 highlights its focus on technological integration, fair taxation, and fostering a business-friendly environment while maintaining revenue efficiency for the government. [8] [9] [10]

History

The concept of GST 2.0 in India emerged in early 2025 as a continuation and upgrade of the Goods and Services Tax system implemented in 2017. [11] The main aim of GST 2.0 was to simplify the tax structure, reduce compliance burden on businesses, and adjust tax rates according to economic needs. [12] [13]

The idea was first proposed by the Ministry of Finance after reviewing the impact of the 2017 GST framework. Several committees were formed to analyze which goods and services should have lower or higher tax rates, ensuring fairness and promoting economic growth. [14] [15]

By mid-2025, the new rates were announced and officially came into effect across India. The rollout included detailed guidelines for businesses, online portals for filing returns, and public awareness campaigns to help citizens understand the changes. GST 2.0 was widely seen as an effort to make India’s indirect tax system more adaptive, transparent, and efficient. [16] [17]

Following the implementation of GST 2.0, the government closely monitored its impact on different sectors. Industries like manufacturing, retail, and services experienced changes in compliance procedures, while consumers noticed adjustments in prices for everyday goods. [18] The feedback loop allowed authorities to make small tweaks to rates, making the system more flexible than the previous GST version. [19] [20]

Moreover, GST 2.0 focused heavily on digitization. E-invoicing, automated return filing, and improved tracking mechanisms were introduced to reduce tax evasion and enhance transparency. [21] [22] Training programs and workshops were conducted across the country to help businesses adapt smoothly. [23] This period marked a significant step in India’s journey toward a more modern and efficient taxation framework. [24] [25]

List of Items (Slab Tax)

There are 4 levels of list of Items of GST 2.0 :

Sl. NoItem/CategoryItemsPrevious GST RateNew GST Rate
1 Foods (Daily) Milk, Bread, Fruits and Vegetables 5%0%
2Individual Items & Life Insurance N/A18%0%
3 Stationary Items Books, Pen, Pencil and Eraser 12%0%
Sl. NoItem/CategoryItemsPrevious GST RateNew GST Rate
1 Medical & Diagnostic Thermometer, Medical grade oxygen, All diagnostic kits & reagents, Glumetor & test strips 12%5%
2 Eye Care Corrective spectacles 5%5%
3Agriculture Equipment Tractor types & parts, Tractor, Specified bio pesticides, micro nutrients, Drip irrigation system & sprinklers, Agricultural, horticulture or forestry machines for soil preparation, cultivation, harvesting & threshing 12%-18%5%
4 Personal Care & Hygiene Hair, Oil, Shampoo, Toothpaste, Toilet soap bar, Tooth brushes, Shaving cream 18%5%
5 Dairy & Snacks Butter, Ghee, Cheese & dairy spreads, Pre-packaged namkeens, bhuija & mixtures 5%5%
6 Household ItemsUtensils, Sewing machine & parts12%5%
7 Baby & Clinical Items Feeding bottles, Napkins for babies & clinical doctors 5%5%
Sl. NoItem/CategoryItemsPrevious GSTNew GST
1 Automobiles Petrol & Petrol Hybrid, LPG, CNG Cars (not exceeding 1200 cc & 4000 mm)28%18%
2 Automobiles Diesel & Diesel Hybrid (not exceeding 1500 cc & 4000 mm)28%18%
3 Automobiles 3 wheeled vehicles28%18%
4 Motorcycles Motor cycles (350 cc & below)28%18%
5 Transport Vehicles Motor vehicle for transport of goods 28%18%
6 Home Appliances Air conditioners 28%18%
7 Electronics Television (above 32") including LED & LCD TVs28%18%
8 Electronics Monitors & Projectors 28%18%
9 Home Appliances Dish washing machines 28%18%
Sl. NoItem/CategoryItems NamePrevious GST RateNew GST Rate
1 Luxury & Leisure Private( helicopter, Airplane), Alcohol, beer, wine, Soft drinks, Super bikes, large cars, Tobacco, cigarettes, Pan masala, Yachts and Luxury items28%-30%40%

Revenue Tax

GST 2.0 (India) Revenue Estimate for 2025 :

Estimates Revenue Loss Due to Rate Cuts

The government anticipates a revenue loss of approximately ₹93,000 crore resulting from the reduction in GST rates across various sectors. [26] [27]

Additional Revenue from Higher Tax Slabs

Conversely, the introduction of a 40% GST slab is expected to generate an additional ₹45,000 crore in revenue. [28] [29]

Net Revenue Impact

Considering both the revenue loss and the additional revenue, the net impact is estimated to be a loss of around ₹48,000 crore. [30]

Boost to Consumer Spending

Despite the net revenue loss, the reforms are projected to stimulate consumer spending. According to SBI Research, the direct consumption boost is estimated at ₹70,000 crore, with total additional aggregate demand reaching ₹1.98 lakh crore due to the multiplier effect. [31] [32]

GST collection mechanism

The Goods and Services Tax (GST) in 2025 continues to function as a unified indirect tax system, applied on the supply of goods and services at every stage of production and distribution. Businesses registered under GST collect tax from their customers at the applicable rate and remit it to the government. [33] This system ensures that the tax is levied only on the value added at each stage, preventing cascading taxes and promoting transparency. [34] [35]

Registered businesses are allowed to claim input tax credit for the GST paid on their purchases. This mechanism effectively reduces the tax burden on the final consumer while ensuring that the government collects revenue efficiently. [36] [37] With the introduction of technology-driven compliance, the process of calculating, paying, and claiming GST has become largely automated, minimizing errors and disputes. [38]

All GST payments and filings are managed through a central online portal. Businesses submit periodic returns detailing sales, purchases, and taxes paid, while the portal facilitates refunds, adjustments, and real-time monitoring by tax authorities. [39] This digital framework not only streamlines tax administration but also enhances compliance and accountability across the economy. [40]

Statistics

Revenue Collection (as per 2025) :

Reply :

GST returns and filing

GST returns are the statements that taxpayers submit to the government to report their sales, purchases, and the GST collected or paid. In 2025, the filing process has been streamlined for both businesses and individuals, making it easier to comply. Registered taxpayers must file returns regularly to avoid penalties and ensure smooth input tax credit claims.

There are different types of GST returns depending on the taxpayer’s category, such as GSTR-1 for outward supplies, GSTR-3B for monthly summary reporting, and GSTR-9 for annual filing. Each return captures details of the transactions, the GST liability, and the taxes paid or receivable.

The government has also introduced simplified online filing platforms in 2025, allowing automated data entry, reconciliation, and faster processing. This reduces errors, ensures transparency, and strengthens compliance, benefiting both the administration and taxpayers.

See also

References

  1. ↑ Agarwal, Sushil (21 September 2025). "GST 2.0 Rollout Tomorrow, Sept 22: Full List Of What Gets Cheaper, What Costs More". News 18 . p. 1.
  2. ↑ Bhat, Rajesh (21 September 2025). "New GST Rates Live: On GST 2.0 launch eve, Modi pitches for 'Make in India' – What gets cheaper from tomorrow?". Financial Express . p. 2.
  3. ↑ Bakshi, Harish (21 September 2025). "NDTV Explains What Gets Cheaper Under GST 2.0 Reforms". NDTV . p. 2.
  4. ↑ Hebber, Nistula (21 September 2025). "GST 2.0 implementation a 'festival of savings', first step towards economic self-reliance, PM says in address to nation". The Hindu . p. 1.
  5. ↑ Khatri, Paarth (21 September 2025). "Jeep announces price cut of upto ₹4.84 lakh after GST 2.0". Hindustan Times . p. 2.
  6. ↑ Mishra, Vivek (21 September 2025). "GST 2.0 impact: Companies rush to hire temporary staff; rate cuts expected to boost festive buying". The Times of India . p. 3.
  7. ↑ Mukherjee, Anubhav (21 September 2025). "GST 2.0: These lifesaving drugs and medicines get cheaper from Monday after rate cuts — Check full list". Mint . p. 2.
  8. ↑ Vallabh, Gourav (21 September 2025). "GST 2.0 will be a catalyst for an inclusive Atmanirbhar Bharat". The Indian Express . p. 3.
  9. ↑ Sharma, Aman (21 September 2025). "New GST rates take effect September 22: Navigate GST 2.0 with our guide and interactive dashboard". The Hindu . p. 2.
  10. ↑ Lobo, Sam (21 September 2025). "Full List Of Cars And Bikes That Get Cheaper Under GST 2.0". NDTV . p. 4.
  11. ↑ 'Biswas', 'Samannay' (25 September 2025). "FM Sitharaman on GST 2.0: 'Bachat Utsav Ensures Savings Reach Consumers'". Times Now . p. 2.
  12. ↑ 'Bhatia', 'Chetra' (24 September 2025). "Nainar Nagendran on GST 2.0 impact, alliances and Tamil Nadu campaign". India Today . p. 2.
  13. ↑ 'Pandey', 'Chitra' (22 September 2025). "GST 2.0 gives booster shot to coal sector". DD News . p. 2.
  14. ↑ 'D'Souza', Rohan (21 September 2025). "New GST rates HIGHLIGHTS: 90% of GST benefits will flow to end customers, govt. estimates". CNBC . p. 1.
  15. ↑ Gupta, Dev (21 September 2025). "GST 2.0 in action: How govt is making Diwali savings real for consumers". The Economic Times . p. 2.
  16. ↑ Mukherjee, Anubhav (21 September 2025). "GST 2.0: These lifesaving drugs and medicines get cheaper from Monday after rate cuts — Check full list". Mint . p. 1.
  17. ↑ Shinde, Shilpa (21 September 2025). "GST 2.0: Individual Health Insurance Premiums To Be GST-Free From Tomorrow". NDTV . p. 2.
  18. ↑ Desai, Prakash (21 September 2025). "PM Modi Address Highlights: GST 2.0 makes essentials, homes, vehicles, and travel affordable". CNBC . p. 2.
  19. ↑ Shah, Jeevan (21 September 2025). "Piyush Goyal Urges Industry To Pass On GST 2.0 Benefits To Consumers". NDTV . p. 2.
  20. ↑ Mohan, Archis (21 September 2025). "GST 'savings festival' begins tomorrow; PM pushes swadeshi, self-reliance". Business Standard . p. 1.
  21. ↑ Kashyap, Om (21 September 2025). "PM मोदी का आज देश के नाम संबोधन, GST 2.0 और आत्मनिर्भरता का करेंगे जिक्र!". Aaj Tak . p. 2.
  22. ↑ Rane, Jagdeep (21 September 2025). "What You Need To Know About GST 2.0 As Tax Cuts Kick In On Monday". Zee News . p. 2.
  23. ↑ Shukla, Shiv (21 September 2025). "GST 2.0: कल से लागू होंगी जीएसटी की नई दरें; अब तक किन-किन कंपनियों ने घटाये दाम; जानें सबकुछ". Amar Ujala . p. 2.
  24. ↑ Chakraborty, Raju (21 September 2025). "'Band-Aid On Deep Wounds': Congress Slams PM Modi's Speech On GST 2.0; Mamata Claims Credit For Rate Cuts". ABP . p. 3.
  25. ↑ Waghela, Nitin (21 September 2025). "GST 2.0: How Will It Impact Middle-Class Residing In Mumbai?". Republic World . p. 1.
  26. ↑ Poojary, Anand (21 September 2025). "Want GST 2.0 to be Good and Simple Tax not Growth Supporting Tax: Cong". Udayavani . p. 2.
  27. ↑ Mallik, Zen (22 September 2025). "GST 2.0 Rollout Today, Sept 22: Full List Of What Gets Cheaper, What Costs More". News18 . p. 2.
  28. ↑ Upsani, Siddharth (21 September 2025). "PM Modi says 'GST savings festival' begins tomorrow: with lower prices, how household budgets are set for boost". The Indian Express . p. 2.
  29. ↑ Ahmed, Salman (21 September 2025). "New GST Rates Live Updates: PM Modi's Strong Message - Pride Lies In 'Made in India' Goods". ET Now . p. 1.
  30. ↑ Rathore, Vishal (20 September 2025). "GST 2.0 a tax revolution, says FM Nirmala Sitharaman". The New Indian Express . p. 1.
  31. ↑ Sheikh, Ali (20 September 2025). "Amul passes on Full GST 2.0 Reduction Benefit to Customers; 700+ products to get cheaper". Udayavani . p. 2.
  32. ↑ Singh, Jagdish (21 September 2025). "Rajasthan govt to host week-long 'GST Savings Festival' from Sept 22-29". Business Standard . p. 2.
  33. ↑ Gill, Ashish (22 September 2025). "GST 2.0 comes into effect: What's getting cheaper and costlier from today". India Today . p. 2.
  34. ↑ Agarwal, Amit (19 September 2025). "घर में कीजिए दादागिरी, जमकर कीजिए शॉपिंग', अमित शाह का महिलाओं को जीएसटी 2.0 को लेकर मैसेज". Aaj Tak . p. 2.
  35. ↑ Mansukiya, Esha (19 September 2025). "Green hydrogen costs declined, may reduce further with GST cuts but USD 1-2/kg target remains distant: Report". ANI . p. 2.
  36. ↑ Kumar, Rajeev (22 August 2025). "GST tax slab revamp explained: What may get cheaper, costlier and change". ABP . p. 2.
  37. ↑ Bansal, Anshu (21 September 2025). "GST 2.0 Rate Cuts: Patanjali Foods reduces MRPs across categories-See new price list". Zee Business . p. 2.
  38. ↑ Gourh, Prince (22 September 2025). "GST 2.0 आज से लागू: क्या हुए बदलाव, दुकानदारों पर पड़ेगा कोई असर? यहां जानिए हर सवाल का जवाब". Jagran . p. 2.
  39. ↑ Shetty, Sudhirnda (19 September 2025). "ಜಿಎಸ್‌ಟಿ 2.0 ಜಾರಿಯಿಂದ ಕೇಂದ್ರ ಸರಕಾರಕ್ಕೆ ಎಷ್ಟು ನಷ್ಟ? ತಜ್ಞರ ಲೆಕ್ಕಾಚಾರ ಏನು?". Vijaya Karnataka . p. 2.
  40. ↑ Singh, Roshan (20 September 2025). "Punjab: Verka dairy products get cheaper after GST cut". Hindustan Times . p. 1.
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