Up To 30% Tax Savings For Households Under GST 2.0, Says FICCI

Indian households are set to benefit from tax savings of up to 27 to 30 per cent under the new GST 2.0 regime, according to a report released by the Federation of Indian Chambers of Commerce and Industry's Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (FICCI CASCADE) along with the Thought Arbitrage Research Institute (TARI).

The joint report, titled "Decoding the Journey of GST Reforms: GST and Its Effect on Economy, Business and Household Consumption", finds that the new framework has eased the tax burden on both essential and discretionary items, providing relief to families across rural and urban India.

The report highlights that GST 2.0 has introduced a more progressive tax structure, where people with higher incomes contribute a larger share of taxes. This, it notes, ensures a fairer system for households at different income levels.

One of the most significant changes under GST 2.0 is the expansion of items taxed at the lowest slab of 5 per cent. While GST 1.0 had 54 categories in this bracket, the number has now increased nearly threefold to 149. This, the report underlines, is helping households manage their monthly budgets more effectively.

Apart from household savings, GST 2.0 is also seen to be supporting small businesses and pushing further formalisation of the Indian economy. By lowering tax rates and reducing price differences, the report states, the system not only encourages compliance but also acts as a deterrent to smuggling and counterfeit trade.

According to the findings, the lower tax rates are expected to ease pressure on consumption, strengthen MSMEs, and bring the country closer to the goal of a single, unified tax market.

The study, based on detailed analysis, suggests that the reform's impact goes beyond savings for consumers. By promoting fairness in taxation and creating a level playing field, GST 2.0 is reshaping the way households and businesses interact with the economy.

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)

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