GST 2.0 Takes Effect Today With Major Tax Reforms Aimed At Easing Prices

(MENAFN- IANS) New Delhi, Sep 22 (IANS) In what is being termed the most significant overhaul of the Goods and Services Tax (GST) regime, the Government of India will implement the revised GST structure from Monday.

The sweeping reforms, approved earlier this month by the GST Council, introduce a simplified two-tier tax system and revise rates for over 375 items, directly impacting household budgets across the country.

Under the new structure, the majority of goods and services will now be taxed at either 5 per cent or 18 per cent, replacing the previous four-slab system. A higher rate of 40 per cent will apply exclusively to ultra-luxury items, sin goods, and other demerit products.

Essential items such as food grains, medicines, and daily-use consumer goods will remain in the 5 per cent bracket, maintaining affordability for the common man. Meanwhile, mid-range products, previously taxed at 12 per cent, may now become cheaper, as the 12 per cent slab has been removed.

Items seeing a reduction in GST rates include ghee, butter, paneer, coffee, snacks, jams, ketchup, dry fruits, and ice cream. The government says this move is designed to provide financial relief to urban and semi-urban households, especially ahead of the festive season.

Marking the launch of the new GST regime, Prime Minister Narendra Modi on Sunday announced the start of a nationwide "GST Utsav" from the first day of Navratri, calling it a“festival of savings” for every Indian.

“Next-gen GST reforms are being implemented from tomorrow. It is like a GST saving festival,” PM Modi said in his 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 the revised Central GST (CGST) rates on September 18, while state governments are issuing corresponding notifications for State GST (SGST). The combined effect of these changes will be felt from Monday.

With the new system, referred to as GST 2.0, the government aims to boost consumption, simplify compliance, and make the indirect tax structure more transparent and citizen-friendly. Small businesses, MSMEs, farmers, women, and youth are expected to benefit significantly from the reforms.

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