Hyderabad: India rolled out a revised Goods and Services Tax (GST) structure today in what the government calls the most significant reform since its introduction. The changes, cleared earlier this month by the GST Council, simplify the tax regime and reset rates for more than 375 items.
GST 2.0 brings a two-tier tax system, rate cuts on key items
The new structure reduces the current four slabs to two. Most goods and services now fall under either 5 per cent or 18 per cent. A higher 40 per cent rate applies only to ultra-luxury items, sin goods, and other demerit products.
Essential items, including food grains, medicines, and basic consumer goods, remain in the 5 per cent bracket. In addition, mid-range products previously taxed at 12 per cent may get cheaper because the slab has been removed.
The revised rates cut GST on ghee, butter, paneer, coffee, snacks, jams, ketchup, dry fruits, and ice cream. As a result, officials said, the move would ease pressure on urban and semi-urban households before the festive season.
Prime Minister Narendra Modi on Sunday launched a nationwide “GST Utsav” campaign to mark the reform. “Next-gen GST reforms are being implemented from tomorrow. It is like a GST saving festival,” he said in a national address. “From September 22, people will be able to buy their favourite items at lower prices. The poor and the new middle class are getting double benefits after the GST rate cuts.”
The Union Finance Ministry notified revised CGST rates on September 18. Meanwhile, state governments issued parallel SGST notifications. Together, the changes came into effect today.
Officials described the reform as GST 2.0. Moreover, they said the system would boost consumption, simplify compliance, and improve transparency. The government expects small businesses, MSMEs, farmers, women, and youth to gain the most from the overhaul.
