India’s Goods and Services Tax (GST) Council has unveiled sweeping tax reforms designed to simplify the tax regime, lower prices, ease living costs, boost demand and stimulate growth.
Effective from 22 September, 2025, “GST 2.0” will get rid of the multiplicity of slabs (5%, 12%, 18% and 28% ) and will introduce a streamlined two-slab tax structure of 5% (merit rate) and 18% (standard rate) with a demerit rate of 40% for super luxury, sin and demerit goods such as pan masala, tobacco and cigarettes.
The GST council approved tax cuts on hundreds of consumer goods, from soap to small cars and budget hotel rentals, in a bid to spur consumption ahead of the festive season as well as to offset pressure from steep US tariffs. The US has recently imposed 50% tariffs on Indian goods.
Indian industry has welcome the move. The Indian stock markets traded higher on Thursday, 04 September – with automotive, cement, FMCG and financial services leading gains as optimism around GST rate cuts lifted sentiment.
What will be the effect of “GST 2.0” on your business?
Disclaimer: The article has reference to open sources including CNBC TV 18, ET and Indian Express.
Image: India Today