In a nation long burdened by a complex and archaic web of taxes, the 2025 GST rate reduction and rationalisation, popularly dubbed GST 2.0, marks a pivotal moment in India’s economic journey. Effective September 22, 2025, this landmark reform, unveiled at the 56th GST Council meeting and unanimously accepted by all states, simplifies India’s indirect tax regime to just two main slabs: 5% and 18%, with a higher 40% sin goods slab for luxury and demerit goods.

This step is far from being a knee-jerk political manoeuvre. It is the culmination of years of deliberation and strategic planning by the Modi government to boost domestic consumption, lower inflation, and drive affordability while ensuring long-term fiscal stability. At a time when global trade faces headwinds due to unilateral protectionist measures and slowing growth, GST 2.0 is a well-calibrated move to empower the kisan, naari, naujawan, and aam aadmi.

India’s original GST, launched in 2017, was itself a milestone, unifying 17 central and 13 state levies into a single tax system and creating a seamless national market. However, it came with multiple slabs and compliance complexities. With GST 2.0, the government has streamlined the structure, cutting taxes on around 175 everyday items and exempting essentials entirely.

Daily-use products such as shampoo, toothpaste, bicycles, footwear (up to ₹1,000), and even small cars have become more affordable. Milk, paneer, and roti are now completely tax-free, directly benefiting millions of households.

Consider this transformation: hair oil, toothpaste, soap, detergents, cosmetics, and furniture are now taxed at 12-18%, down from 17-28%. TVs, refrigerators, washing machines, and electrical appliances dropped from 31.3% to 18%. Movie tickets and mobile phones, previously at 18-35%, are now at 12-18%. Sanitary pads, once taxed at 12%, are fully exempt, a massive win........

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